S^Litte 


Statesman 


ARMSTRONG 


THE  ARIEL  LIBRARY  SERIES.  Issued  quarterly.  N,i.  .;.  September. 

$2.<X>  per  year.       Entered  at  Chicago  Post-office  as  second-class  mail  matter. 


THE  SCHULTE  PUBLISHING  CO. 

334  Dearborn  Street 
CHICAGO 


THE 

LITTLE 

STATESMAN 


presented  to  the 
UNIVERSITY  LIBRARY 
UNIVERSITY  OF  CALIFORNIA 
SAN  DIEGO 

by 


JUDGE  J.M.   CARTER 


1  Don't  throw  your  vote  away." 

* 

The 

Little 

Statesman 


A  Hiddle-of-the-Road  Manual  for 
American  Voters.. 


CDITCD   BY 

K.  L.  ARMSTRONG 


'  This  word  to  all  when  I  am  dead  : 
Be  sure  you're  right;  then  go  ahead." 

Davy  Crockett. 


CHICAGO: 

COPYRIGHT,  1895 

THE  SCHULTE  PUBLISHING  COMPANY 


SUMMARY  OF  CONTENTS. 


A  Short  History  of  American  Politics 9 

The  Steps  in  the  Growth  of  American  Lib- 
erty— Magna  Charta — The  Declaration 

of  Independence,  etc 34 

The  Constitution  of  the  United  States. ...     41 
The  New  Declaratiop  of  Independence — 

The  Omaha  Platform 56 

A  New  Study  of  Political  Economy  Based 

on  the  Omaha  Platform 61 

Sectionalism  in  American  Politics. . . 92 

The  Laws  of  Property 99 

Interest  and  Usury 105 

Debt  and  Slavery.... in 

The  Land  Question 116 

An  Exposition  of  the  Single  Tax 120 

Co-operation 142 

Direct  Legislation  —  The  Initiative  and 
Referendum — Proportional  Representa- 
tion   150 

The  Philosophy  of  Money 1 57 

A  Bird's-Eye  View  of  American  Financial 

History 177 

The  Eight  Money  Conspiracies 207 

The  Documentary  Evidence 213 

The  Transportation  Problem 220 


i»  "And  the  Lord  said  unto  Moses,  Wherefore  cries  t  thou? 
Speak  unto  the  children  of  Israel  that  they  go  forward"  — 
Exodus  14:15. 


INTRODUCTION. 

<%> 

THE  IMPENDING  REVOLUTION. 

purpose  of  this  book  is  to  present  in  compact  form  a 
series  of  articles  on  politics  and  political  economy  from 
the  point  of  view  of  one  who,  realizing  that  a  world-wide 
economic  revolution  is  imminent,  hopes  that  this  revolution 
will  be  accomplished  by  reason  and  in  peace,  not  by  treason 
and  violence  —  by  book  and  ballot,  not  by  bullet  and  bayonet.  \ 
It  is  not  intended  as  a  special  plea  for  the  doctrines  of  any  par- 
ticular school  of  economics,  nor  is  it  put  forth  as  the  official 
utterance  of  any  political  party.  The  object  is  rather  to  place 
in  concrete  the  arguments  and  principles  of  the  several 
branches  of  Reform  thought,  which,  while  widely  divergent  in 
respect  of  methods,  have  a  common  aim  in  the  emancipation  of 
industry.  Since  practical  economic  reform  is  a  propaganda  and 
not  merely  a  school  of  abstract  philosophy,  there  is  need  of 
literature  to  assist  the  convert  in  choosing  his  new  articles  of 
faith.  On  this  line  "  The  Little  Statesman  "  is  projected. 

The  many  elements  which  make  up  the  great  and  growing 
army  of  Reform  may  be  segregated  into  two  divisions  —  individ- 
ualists and  collectivists.  In  the  early  history  of  this  nation 
the  men  who  had  battled  for  its  independence  were  similarly 
divided  into  two  great  parties—  one  advocating  the  centraliza- 
tion of  power  in  the  national  government,  the  other  demand- 
ing for  each  State  sovereign  independence.  The  flexibility  of 
our  Constitution  is  ascribed  to  the  wisdom  of  the  fathers,  who 
sought  out  and  adopted  what  was  best  in  the  ideas  of  both. 
So  out  of  the  apparently  conflicting  elements  of  the  reform 
movement  will  come  the  ultimate  solution  of  economic  prob- 
lems. 

The  editor  is  an  individualist,  not  a  collectivist  or  commun- 
ist. The  industrial  commonwealth  he  believes  to  be  imprac" 
ticable,  although  he  is  in  thorough  sympathy  with  Socialism 


vi  The  Impending  Revolution. 

in  so  far  as  it  advocates  the  public  ownership  of  monopolies. 
The  people  should  own  and  operate  the  railroads,  the  telegraph, 
the  telephone,  etc.,  as  they  already  do  the  post-office.  The 
people  should  also  own  and  operate  street  railroads,  water- 
works, gas-works,  electric  light  plants,  etc.  The  notorious 
corruption  of  our  law-making  bodies  is  due  almost  wholly  to 
their  power  to  grant  special  privileges  and  to  sell  public  fran- 
chises to  private  individuals  or  corporations.  Legislative  reform 
that  ignores  the  cause  of  corruption  is  never  remedial  and  sel- 
dom even  palliative.  Public  ownership  of  natural  monopolies 
will  abolish  the  bribe-taker  by  making  impossible  the  bribe- 
giver. 

Complaint  will  be  made  of  "  The  Little  Statesman " 
because,  while  it  touches  nearly  every  other  question,  no  men- 
tion is  made  of  the  customs  tariff.  The  tariff  is  largely  a  local 
issue  upon  which  the  plutocrats  of  the  Republican  party  and 
the  plutocrats  of  the  Democratic  party  have  agreed  to  disagree 
in  order  to  prevent  the  discussion  of  vital  questions. 

One  of  these  vital  questions,  and  the  one  which  presents 
itself  just  now  for  immediate  solution,  is  that  of  Money.  The 
attitude  of  the  two  leading  parties  on  this  subject  furnishes  a 
most  glaring  instance  of  political  dishonesty.  In  spite  of  the 
efforts  of  the  politicians,  however,  the  money  question  will 
not  down,  and  that  phase  of  it  which  appeals  most  strongly  at 
this  time  to  the  people  is  the  proposition  to  again  open  the 
mints  to  the  free  coinage  of  silver. 

Money  is  the  public  credit,  stamped  or  imprinted  upon,  or 
represented  by,  metal,  paper,  or  any  other  convenient  substance 
recognized  by  1;  w  or  usage,  and  employed  as  a  medium  of  ex- 
change and  a  measure  of  values.  Money  is  money  only  so  long 
and  in  so  far  as  it  represents  the  public  credit.  Moses,  as  well  as 
the  early  fathers  of  the  Christian  Church,  undoubtedly  adopted 
this  view  of  money  when  they  denounced  usury,  which  is  the  de- 
vice whereby  the  drones  in  humanity '  s  bee-hive,  monopolizing 
the  public  credit,  have  in  all  ages  exacted  tribute  from  the 
workers. 

The  right  to  issue  money  is  a  sovereign  right  and  should  be 
jealously  guarded  by  a  sovereign  people.  To  delegate  this 


The  Impending  'Revolution.  vii 

power  to  banks  and  money-lenders  is  as  grave  an  error  as  it 
would  be  to  confer  on  a  class  the  privilege  of  making  laws  for 
the  whole  community 

The  volume  of  money  should  be  regulated  to  suit  the  re- 
quirements of  all  the  people  and  not  the  greed  of  those  who 
thrive  on  usury. 

The  use  of  metals  for  money  is  unscientific,  and  they  will 
eventually  be  relegated  to  obscurity  with  the  shells,  pelts, 
tally -sticks  and  other  cumbrous  mediums  of  exchange  employed 
by  our  ancestors.  But  great  reforms  cannot  be  accomplished 
at  once.  Gold  and  silver  are  the  money  of  the  Constitution. 
The  Act  of  1873,  which  demonetized  silver  and  made  gold  alone 
the  basis  of  credit,  and  which,  by  reducing  the  volume  of 
money,  doubled  the  burden  of  debt,  was  a  violation  of  the 
fundamental  law  of  our  government. 

The  wrong  perpetrated  by  John  Sherman  in  1873  must  be 
righted  now.  This  is  the  first  great  step  in  monetary  reform. 

Following  this,  the  issue  of  interest-bearing  bonds  must  be 
stopped  forever.  The  careful  student  will  find  that  interest — 
usury — is  at  the  bottom  of  all  our  financial  ills.  Unselfish 
patriotism  must  abolish  usury  by  substituting  the  credit  of  all 
the  people  for  that  of  the  banks. 

Every  physical  or  moral  ill  is  the  result  of  some  breach  of 
natural  or  divine  law.  For  generations  we  have  violated  the 
laws  of  God  as  they  relate  to  money  and  to  land. 

"And  if  thy  brother  be  waxen  poor  and  fallen  in  decay  with 
thee,  then  thou  shalt  relieve  him;  yea,  though  he  be  a  stranger 
or  a  sojourner;  that  he  may  live  with  thee.  Take  thou  no  usury 
of  him  or  increase;  but  fear  thy  God,  that  thy  brother  may  live 
with  thee."  (Lev.  25:  36-37.) 

Moses,  the  inspired  law-giver,  the  great  soldier-poet-states- 
man who  led  a  semi-barbarous  people  from  the  slavery  of 
Egypt  and  made  of  them  a  nation  which  endured  the  longest 
in  the  world's  history,  wrote  these  words. 

We  also  read:  "The  land  shall  not  be  sold  forever:  for  the 
land  is  mine  [saith  the  Lord] ;  for  ye  are  strangers  and  sojourn- 
ers  with  me."  (Lev.  25:  23.) 

Let  the  Christian  world  cease  bickering  over  questions  of 


\ 


viii  The  Impending  Revolution. 

dogma  and  study  again  the  inspired  law  of  Moses,  the  law 
which  Christ  came  to  fulfill,  and  a  solution  of  all  the  many 
questions  which  now  vex  us  will  soon  be  found. 

Under  the  Mosaic  law,  slaves  were  emancipated,  human  life 
was  made  sacred,  debtors  were  liberated  every  sever  years, 
inherited  property  was  divided  and  paternal  inheritances  were 
alienated,  luxury  and  extravagance  were  discouraged,  and  by 
forbidding  land-monopoly  and  usury  (in  the  Bible  usury  and 
interest  are  synonymous)  disproportionate  fortunes  and  vast 
accumulations  of  wealth,  which  have  caused  the  decline  of  the 
world's  great  empires  and  are  now  threatening  the  foundations 
of  modern  civilization,  were  made  impossible. 

Chattel  slavery  no  longer  exists  in  any  part  of  the  civilized 
world,  imprisonment  for  debt  has  been  abolisned,  the  right  of 
the  people  to  rule  is  established,  but  humanity  is  still  bound 
in  chains  of  servitude  as  galling  and  oppressive  as  in  any  period 
of  its  history.  The  rule  of  kings  is  passing  away,  but  the 
autocracy  of  money  and  monopoly  is  seated  on  the  throne 
and  swaying  a  more  imperious  scepter. 

But  the  people  have  it  in  their  power  to  overthrow  their  op- 
pressors. Here  in  this  coun  try ,  at  least,  we  have  the  ballot.  The 
duty  of  the  hour  is  to  study  political  economy,  so  that  this 
weapon  may  be  wielded  intelligently  and  effectively.  "  Edu- 
cation ' '  must  be  our  watchword.  It  is  only  by  education  that 
we  may  hope  to  gain  the  three  great  essentials  for  perfect 
liberty  and  equality:  direct  legislation — direct  money — direct 
taxation.  These  will  establish  forever  the  sovereignty  of  the 
people.  If  this  small  volume  serves,  even  in  a  slight  degree, 
to  educate  the  beginner,  to  edify  and  encourage  those  who  are 
already  enlightened,  or  to  render  more  cohesive  and  homoge- 
neous the  sometime  warring  elements  of  economic  reform, 
the  editor  will  feel  that  his  reward  is  ample. 

F.  J.  S. 

CHICAGO,  JANUARY,  1896. 


t  "fie  rules  who  reads" 

A  SHORT  HISTORY  OF  AMERICAN  POLITICS. 

The  Rise  and  Fall  of  Political  Parties. 

IT  18  only  by  the  past  that  we  may  wisely  judge  the  future. 
To  correctly  foresee  the  possibilities  of  the  great  Reform 
movement  now  in  process  of  evolution  we  must  know  the 
origin,  growth  and  decadence,  the  promises  and  accomplish- 
ments of  political  organizations  since  the  United  States  became 
an  independent  nation. 

Until  Thomas  Paine's  "Common  Sense"  appeared,  the  sub- 
ject of  American  independence  was  almost  tabooed.  As  late 
as  March,  1775,  Franklin  assured  Pitt  that,  though  he  had 
traveled  in  America,  he  had  never  heard  any  expression  in 
favor  of  independence.  But  men,  women  and  children  read 
Paine's  pamphlet.  It  liberated  them  from  prejudice  and  gave 
them  fresh  ideas  and  fresh  courage. 

Rhode  Island  was  the  first  of  the  colonies  to  declare  her- 
self "free  from  all  dependence  on  the  crown  of  Great  Britain." 
This  was  on  May  4,  1776.  The  Assembly  of  Virginia  in  the 
same  month  instructed  her  delegates  to  the  Continental  Con- 
gress to  present  to  that  body  a  proposition  "affirming  the  inde- 
pendence of  the  colonies  from  Great  Britain."  In  compliance 
with  these  instructions  Richard  Henry  Lee,  of  Virginia,  on 
June  7, 1776,  introduced  his  famous  resolution:  "That  these 
united  colonies  are,  and  of  right  ought  to  be,  free  and  inde- 
pendent States;  that  they  are  absolved  from  all  allegiance  to 
the  British  crown;  and  that  all  political  connection  between 
them  and  the  state  of  Great  Britain  is,  and  ought  to  be,  totally 
dissolved.  That  it  is  expedient  forthwith  to  take  the  most 
effectual  measures  for  forming  foreign  alliances.  That  a  plan 
of  confederation  be  prepared  and  transmitted  to  the  respective 
colonies  for  their  consideration  and  approbation."  John  Adams 
seconded  these  resolutions,  and  an  animated  discussion  en- 
sued. On  June  8,  a  committee,  consisting  of  Thomas  Jeffer- 
son, John  Adatns,  Benjamin  Franklin,  Roger  Sherman  and 
Robert  R.  Livingston,  was  appointed  to  draw  up  a  declaration 

9 


10  A  History  of  American  Politics. 

of  independence  embodying  the  sense  of  Lee's  resolutions.  On 
July  2,  Lee's  resolutions  were  passed  by  the  vote  of  twelve  of 
the  thirteen  colonies,  the  New  York  delegates  refraining  from 
voting  for  want  of  instructions  from  their  province.  On  July 
3,  the  formal  declaration,  almost  precisely  as  written  by 
Thomas  Jefferson,  was  presented  by  the  committee  above 
named,  and  was  debated  with  great  spirit,  John  Adams  being 
the  chief  speaker  on  the  part  of  the  committee.  The  discussion 
was  resumed  on  the  morning  of  the  4th,  and  at  2  o'clock  in  the 
afternoon,  after  one  or  two  slight  modifications,  it  was  adopted. 
The  announcement  was  hailed  with  the  liveliest  enthusiasm. 
"Ring!  ring!"  shouted  the  lad  stationed  below  to  give  the  signal 
to  the  old  bellman  in  the  State-house  tower;  and  he  did  ring 
until  the  whole  city  shouted  for  joy.  The  King's  arms  were 
wrenched  from  the  Court-house  and  burned  in  the  streets; 
bonfires  were  lighted,  the  city  illuminated,  and  the  exultation 
was  prolonged  far  into  the  night.  In  New  York  City  the 
populace  hurled  the  leaden  statue  of  George  III.  from  its 
pedestal  and  molded  it  into  bullets,  and  in  all  the  great  cities 
similar  demonstrations  of  enthusiasm  were  exhibited. 

The  Declaration  of  Independence  was  signed  Aug- 
ust 2, 1776,  when  President  John  Hancock  said:  "There  must 
be  no  pulling  different  ways,  we  must  all  hang  together,"  to 
which  Franklin  replied,  "Yes,  we  must  all  hang  together,  or 
we  shall  all  hang  separately." 

State  constitutions  were  adopted  in  the  same  year  as  fol- 
lows: By  New  Jersey  (July  2),  Virginia  (July  5),  Pennsylvania 
(July  15),  Maryland  (Aug.  14),  Delaware  (Sept.  20),  North  Caro- 
lina (Dec.  18). 

New  York,  South  Carolina  and  Georgia  adopted  constitu- 
tions in  1777,  Massachusetts  in  1780,  and  New  Hampshire  in 
1781.  Connecticut  and  Rhode  Island  continued  to  use  their 
royal  charters  until  1818  and  1840,  respectively.  Few  of  the 
State  constitutions  admitted  religious  liberty.  That  of  Massa- 
chusetts provided  against  luxury,  plays,  extravagance  in  dress, 
diet,  and  the  like,  nd  every  minister  in  the  State  was  obliged 


A  History  of  American  Politics.  11 

to  read  the  constitution  to  his  congregation  once  a  year. 

1778 — Independence  of  United  States  acknowledged  by 
Prance  by  a  treaty  of  alliance  and  commerce. 

1779— Naval  victory  of  John  Paul  Jones. 

1781 — A  French  fleet  in  aid  of  the  United  States  drives  the 
British  from  Chesapeake  Bay.  Surrender  of  Cornwallis. 

1782 — Independence  recognized  by  Holland. 

1783 — Independence  acknowledged  by  Sweden,  Denmark, 
Spain  and  Russia,  successively.  Definite  treaty  of  peace  with 
Great  Britain,  Sept.  3. 

1789 — Formation  and  adoption  of  the  Constitution. 

American  politics  begins  properly  with  the  close  of  the 
Revolutionary  war.  When  the  British  departed  they  left  be- 
hind them  thirteen  separate  and  independent  States  joined 
together  in  a  feeble  confederation  and  governed  as  a  whole, 
so  far  as  they  would  consent  to  be  governed  at  all,  by  the  in- 
adequate Continental  Congress.  The  finances  were  in  a  de- 
plorable condition;  the  States  were  jealous  of  each  other  and 
of  the  Congress.  As  everything  was  badly  defined  and  unset- 
tled, there  were  constant  encroachments  and  abuses,  and  it 
seemed  that  after  achieving  freedom  America  was  about  to 
cast  it  away. 

During  the  war  of  the  American  Revolution  there  were 
two  parties — the  Tories,  who  were  English  in  sympathy 
and  held  to  the  old  doctrine  of  the  divine  right  of  kings  to  rule 
the  people,  and  the  Whigs,  who  were  American  to  the  core 
and  whose  platform  of  principles  was  the  Declaration  of  Inde- 
pendence. About  the  end  of  the  first  year  of  the  war  the 
Whigs,  inspired  principally  by  the  patriotic  appeals  of  Frank- 
lin, Jefferson  and  Paine,  advanced  to  the  bold  ground  of  total 
separation  from  Great  Britain.  The  Tories,  in  turn,  became 
the  supporters  of  the  crown.  Although  all  who  favored  Ameri- 
can independence  were  politically  known  as  Whigs,  they  were 
subdivided  into  factions  known  as  "Sons  of  Liberty,"  "Liberty 
Men"  and  "Patriots,"  the  latter  being  the  men  who  took  the 
most  active  part  in  the  prosecution  of  the  war. 

The  Tory  party  drew  to  its  ranks  nearly  all  office-holders, 
"loyal"  pap-suckers,  many  lawyers,  tenants  of  English  land- 


12  A  History  of  American  Politics. 

holders,  and  well-meaning  but  weak-kneed  men  who  thought 
that  the  Colonists  had  no  chance — very  much  like  many 
chicken-hearted  third  party  men  who  vote  the  old  party  ticket 
because  they  think  the  third  party  "has  no  chance."  The 
Patriots,  however,  made  things  decidedly  warm  and  entertain- 
ing for  the  Tories.  Every  art  of  persuasion,  from  tar  and 
feathers  to  a  rope's  end,  was  used  to  convince  the  Tories  of  the 
error  of  their  ways.  At  the  close  of  the  war  many  of  them 
were  banished — some  of  them  returned  to  England  and  others 
settled  in  Upper  Canada.  The  more  harmless  ones  were  per- 
mitted to  remain  in  the  country. 

The  success  of  the  war  ended  the  Tory  party,  but  the 
Whigs  maintained  their  organization  for  some  years.  Then  a 
new  party  arose,  formed  largely  out  of  the  old  Tory  party — 
who,  in  fact,  went  into  it  as  a  class,  and  the  more  conservative 
Whigs.  This  party  was  called  the  Federal  Party  and  favored 
a  closer  and  lasting  union  in  which  the  States  should  bind 
themselves  into  a  compact  government.  The  opposing  party 
called  themselves  Aiiti- Federalists,  and,  while  generally 
admitting  the  need  of  a  closer  and  more  binding  union,  sought 
to  preserve  the  sovereignty  and  independence  of  the  States. 
Our  Constitution  and  our  form  of  government  are  the  result  of 
the  two  opposing  forces  of  these  early  days — the  radical 
Whigs,  who  believed  in  the  doctrine  of  "inalienable  rights"  for 
all  and  in  a  liberal  construction  of  the  Constitution,  and  the 
conservative  Federalists,  who  did  not  believe  in  the  doctrine 
of  equal  rights  and  who  regarded  the  new  government  rather 
as  an  elective  monarchy  than  as  a  republic. 

It  is  impossible  here  to  do  more  than  outline  the  growth 
of  parties,  but  no  man  can  be  an  intelligent  voter  who  does 
not  study  the  foundation  of  the  republic.  Every  citizen  should 
pursue  this  subject  further  in  the  pages  of  the  Federalist, 
which  argued  one  side  of  the  issue,  and  in  the  writings  of 
Thomas  Jefferson,  who  upheld  the  other.  It  will  show  how 
high  ran  feeling  at  the  time,  when  it  is  pointed  out  that,  al- 
though the  Constitution  was  adopted  in  1787,  it  was  ratified 
but  by  eleven  States  in  1788. 

GEORGE  WASHINGTON  (1789-1797)  was  the  unan- 


A  History  of  American  Polities.  13 

imous  choice  of  the  first  electoral  college,  and  the  hero  of  the 
Revolution  became  the  first  President  of  the  United  States  in 
1789.  It  is  not  to  be  imagined  that  even  at  that  time  the  peo- 
ple were  all  of  one  mind  about  the  Constitution.  There  is  no 
document— not  even  the  Bible — which  is  not  subject  to  dif- 
ferent interpretations,  and  the  great  charter  of  our  American 
liberties  was  no  exception  to  the  rule.  Parties  were  distin- 
guished as  strict  constructionists  and  loose  constructionists, 
the  former  the  Federalists,  the  latter  the  Anti-Federalists,  the 
first  believing  in  a  strongly  centralized  government,  the  second 
jealously  observant  of  the  rights  of  the  States.  The  contest 
between  the  parties  was  the  great  question  which  afterwards 
shook  the  country  from  center  to  circumference,  in  the  agony 
of  civil  war — it  was  the  contest  between  "State  Sovereignty" 
and  a  "Xation." 

Hamilton,  Jay  and  Madison  were  conspicuous  for  their 
support  of  the  Federal  cause,  while  Jefferson,  John  Hancock, 
Patrick  Henry,  Sam  Adams  and  George  Clinton  espoused  the 
cause  of  the  Anti-Federalists,  or  State  Rights  party.  Thus 
originated  the  names,  Hamiltonian  and  Jeffersonian,  which 
even  to  this  day  distinguish  the  difference  between  a  strong 
centralized  government  and  the  more  democratic  idea  of  a 
strong  local  government.  That  the  one  carried  to  an  extreme 
leads  to  monarchy,  there  can  be  no  more  question  than  that 
the  other,  if  carried  to  a  like  extreme,  would  lead  to  weakness, 
dissolution,  and,  perhaps,  anarchy.  How  to  avoid  either  ex- 
treme, should  be  the  aim  and  object  of  every  patriot  and 
statesman. 

Of  course  other  issues  complicated  the  old  ones.  The  Anti 
Federalists  warmly  urged  the  alliance  with  France.  In  the 
revolution  which  had  just  ended,  the  French  alone  had  first 
come  to  our  aid,  and  on  land  and  sea  had  waged  war  upon  our 
common  enemy.  Hence  there  was  a  lively  sense  of  gratitude 
to  that  great  nation  throughout  the  country,  made  none  the 
less  by  the  establishment  of  the  republic.  The  Federalists, 
on  the  other  hand,  inclined  toward  England  as  the  natural 
friend  through,  the  ties  of  kinship  and  common  language. 

Alexander  Hamilton,  the  head  of  the  Federalist  party,  was 


14  A  History  of  American  Politics. 

the  controlling  spirit  in  Washington's  cabinet.  Under  his  in- 
fluence as  Secretary  of  the  Treasury  a  bill  was  passed  in  1791 
which  introduced  the  monarchical  financial  system  of  Europe 
by  establishing  a  national  bank,  called  the  United  States 
Bank,  modeled  after  the  Bank  of  England  and  chartered  for 
twenty  years.. 

Hamilton's  was  the  English  idea — hard  money  and  a  gov- 
ernment bank,  a  union  of  church  and  state,  and  a  funding 
scheme  for  absorbing  the  national  debt.  The  Federal  party, 
of  course,  supported  Hamilton's  views,  while  the  Anti-Federals 
bitterly  opposed  them.  Hamilton  and  Knox  championed  the 
United  States  Bank,  while  Jefferson  and  Randolph  opposed 
it  and  declared  it  unconstitutional.  Jefferson  said  of  it: 
"This  bank  corporation  will  come  to  control  the  Government 
in  its  own  selfish  interest  and  menace,  if  it  does  not  destroy, 
the  liberties  of  the  people." 

In  nearly  every  tendency  toward  monarchy  can  be  found 
the  hand  of  Hamilton.  However  brilliant  may  have  been  his 
genius,  however  great  may  have  been,  in  many  things,  his  serv- 
ices to  the  young  republic,  the  thoughtful  and  reflective  mind 
can  only  regard  his  influence  in  shaping  the  career  of  the  na- 
tion as  evil  and  calamitous.  He  was  an  aristocrat.  His  heart 
was  not  in  sympathy  with  purely  democratic  institutions.  He 
would  undoubtedly  have  preferred  the  establishment  of  a 
monarchy  instead  of  a  republic. 

Fortunately  for  the  republic  there  lived  at  the  same  time 
a  man  in  every  sense  his  equal,  and  in  point  of  patriotism, 
liberality  and  genuine  republicanism  transcendently  his  supe- 
rior— Thomas  Jefferson,  the  acknowledged  leader  of  the  anti- 
Hamiltonian  or  Anti-Federal  party. 

After  the  adoption  of  the  Constitution,  together  with  the 
ten  amendments,  the  name  anti-Federal  was  dropped,  and  the 
name  "Democratic-Republican"  adopted — though  the  word 
"Democratic"  was  usually  omitted,  and  only  the  word  "Re- 
publican" used.  No  doubt  the  fact  that  reproach  and  ridicule 
was  attached  to  the  word  "Democrat"  (very  much  as  the  aris- 
tocrats of  today  ridicule  third  party  men)  had  a  good  deal  to 
do  with  eliminating  it  from  the  party  name.  It  was  applied 


A  History  of  American  Politics.  15 

to  the  Jeffersonians  very  much  as  the  word  "communist"  and 
"anarchist"  is  frequently  applied  in  these  days  to  Populists — 
because  it  was  an  appellation  assumed  by  the  Jacobins  of 
Prance.  Therefore  it  may  be  said  that  the  word  "Democrat," 
used  as  the  name  of  a  party,  had  its  origin  in  this  country  as  a 
name  of  reproach. 

In  spite  of  differences  of  opinion,  which  were  daily  grow- 
ing more  bitter,  there  was  practically  no  partisanship  during 
Washington's  administration.  He  called  Federalists  and 
Anti-Federalists  into  his  cabinet,  and  his  farewell  address, 
which  every  school-boy  has  read,  is  full  of  grave  warning 
against  the  evils  and  dangers  of  party  spirit. 

But  with  Washington  in  retirement,  the  contest  began. 
The  Federalists  put  JOHN  ADAMS  (1797-1801)  in  the  field, 
and  elected  him  in  spite  of  the  English  treaty  which  John  Jay 
had  made  and  which  Adams  had  supported.  Thomas  Jefferson 
became  Vice-President,  because  at  that  time  the  Vice-Presi- 
dency went  to  the  man  receiving  the  next  largest  vote  for 
President,  a  system  which  was  in  force  until  1804. 

There  were  many  reasons  why  the  Federalist  triumph 
could  not  be  a  permanent  one.  England  was  intensely  unpopu- 
lar, and  the  administration  was  accused  of  favoring  that  king- 
dom unduly.  The  alien  and  sedition  laws  caused  an  access  of 
the  public  displeasure,  and  the  party  split  into  two  sections, 
one  following  Adams,  the  other  Hamilton.  Nominations  for 
the  election  were  made  by  members  of  Congress;  Adams  and 
Pinckney  were  chosen  as  the  Federal  standard-bearers,  Jeffer- 
son and  Aaron  Burr  as  the  Republican.  Jefferson  and  Burr 
were  elected,  but  as  both  had  received  the  same  number  of 
votes,  the  election  was  thrown  into  the  House,  which  chose 
THOMAS  JEFFERSON  (1801-1809)  the  third  President 
of  the  United  States.  This  was  a  death-blow  to  the  Federal 
party.  And  so  completely  was  it  wiped  out  of  existence  by 
Jefferson's  second  election  that  its  candidate,  Charles  C. 
Pinckney,  received  only  14  electoral  votes  to  Jefferson's  162. 

Under  the  guiding  hand  of  Jefferson  the  republic  was 
gradually  drawn  away  from  the  pernicious  influences  of  the 
Hamiltoniau  idea,  and  put  upon  a  genuine  republican  track. 


16  A  History  of  American  Politics. 

Fortunate,  indeed,  it  proved  to  be  for  the  nation  that  so  great 
and  good  a  patriot  had  the  helm  at  that  critical  period  of  its 
history. 

The  history  of  Jefferson's  administration  was  a  quiet  one. 
He  refused  to  make  the  civil  service  the  spoil  of  victory,  and 
gave  proof  of  the  flexibility  of  his  ideas  of  government  by  the 
purchase  of  Louisiana  Territory  from  France  in  1803,  which 
was  a  measure  tending  strongly  toward  Federalism — giving  a 
hostage,  as  it  were,  to  the  central  government  on  the  part  of 
the  States.  Jefferson  also  agreed  to  the  building  of  the  great 
post  road  to  the  Ohio,  which  was  by  no  means  a  Republican 
scheme.  Among  the  important  events  of  the  administration 
were  the  Burr  expedition,  the  first  threats  of  "secession"  (this, 
by  the  way,  was  a  Federal  idea,  and  first  suggested  on  behalf 
of  the  Northern  States),  the  "embargo"  difficulties  and  the 
naturalization  laws.  At  the  end  of  Jefferson's  second  term  he 
promptly  declined  to  be  considered  a  candidate  for  a  "third 
term,"  thereby  recognizing  and  putting  into  effect  the  example 
of  the  illustrious  Washington. 

JAMES  MADISON  (1809-1817)  was  elected  fourth 
President.  He,  like  Jefferson,  was  a  Republican,  although,  as 
has  been  pointed  out,  that  party  is  more  nearly  akin  to  the 
Democratic  party  of  our  own  time.  C.  C.  Pinckney,  the  Feder- 
alist candidate  who  opposed  him,  and  who  had  run  twice 
against  Jefferson,  received  47  electoral  votes,  while  Madison 
was  given  122.  The  Federalists  lost  every  part  of  the  country 
save  New  England,  and  one  result  of  this  election  was  to  give 
that  sectional  tone  to  our  politics  which  has  to  a  greater  or 
less  extent  endured  to  the  present  time. 

In  1811  the  charter  of  the  national  bank  expired  and  there 
was  an  effort  made  in  Congress  to  re-charter  it.  Its  principal 
support  was  the  remnant  of  the  Hamilton  "strong-government" 
party,  the  Federals — an  interesting  fact  taken  in  connection 
with  the  present  attitude  of  parties  concerning  our  present 
national  banking  system.  The  scheme  to  re-charter,  however, 
failed  to  go  through. 

The  country  was  drifting  into  a  war  with  England  at  this 
time,  and  the  public  spirit  was  aroused  by  the  continual  out- 


A  History  of  American  Politics.  17 

rages  perpetrated  upon  our  sailors  on  the  high  seas  by  British 
ships.  The  Republicans  were  recognized  as  the  fighting  party, 
and  under  the  leadership  of  Calhoun,  Clay  and  Crawford  the 
War  of  1812  was  begun.  The  Federalists  protested,  and  in 
Massachusetts  and  Connecticut  the  Governors  refused  to  allow 
the  militia  to  go  out  of  the  State,  save  to  repel  invasion.  That 
argument  lasted  but  a  short  time,  however,  for  the  country 
was  invaded  and  the  city  of  Washington  captured  and  burned. 
The  treaty  of  peace  was  signed  in  the  winter  of  1814,  but  be- 
fore the  news  reached  this  country  Andrew  Jackson  had 
gained  the  magnificent  victory  of  New  Orleans,  on  January 
8,  1815. 

In  1816  the  Republican  party,  having  been  somewhat  re- 
modeled and  manipulated  by  the  banking  interests,  passed  a 
law  establishing  another  United  States  Bank. 

It  was  during  Madison's  administration  also  that  the 
question  of  a  protective  tariff  was  first  discussed  to  any  extent. 
On  both  the  banking  and  the  tariff  questions  the  two  parties, 
the  Federals  and  Republicans,  had  changed  places — very  much 
as  the  two  old  parties  of  to-day  have  changed  places  on  ifeany 
questions.  For  instance,  in  1862,  the  Republican  party  was  in 
favor  of  a  greenback  currency  and  the  Democratic  party  op- 
posed it.  Afterwards  Republicans  proposed  to  destroy  the 
greenback  money,  and,  as  a  matter  of  opposition  merely,  the 
Democrats,  or  a  portion  of  them,  opposed  it. 

With  the  close  of  Madison's  administration  a  new  era  in 
our  politics  began.  The  questions  of  Federalism  and  of  the 
French  or  English  friendship  were  dead,  and  new  issues  were 
coming  up.  These  were  the  tariff,  the  management  of  finances 
and  the  development  of  industry.  What  became  known  as 
the  Era  of  Good  Feeling  followed,  which  lasted  from  the 
election  of  JAMES  MONROE  (1817-1825)  up  to  1828. 
Upon  Monroe's  second  election,  in  1824,  there  was  no  opposi- 
tion, and  he  would  have  had  the  unanimous  vote  of  the  elec- 
toral college  had  not  one  of  the  electors  declared  that  that 
honor  should  be  confined  sacredly  to  Washington. 

It  was  the  Slavery  Question  which  put  an  end  to  the 
era  of  good  feeling,  and  which  burned  hotly,  and  more  hotly, 


18  A  History  of  American  Politics. 

until  it  wrapped  the  whole  land  in  the  flames  of  civil  war.  It 
began  with  the  application  of  Missouri  for  admission  into  the 
Union  in  1820.  Prior  to  that  time  Mason  and  Dixon's 
Xjine,  which  is  the  boundary  of  Maryland  and  Pennsylvania, 
and  the  Ohio  River,  formed  the  division  between  slave  States 
and  free.  Missouri  lies  beyond  the  Mississippi  River,  and  out 
of  the  limits  fixed,  and  the  question  was  a  threatening  one 
until  Henry  Clay  brought  in  his  famous  Missouri  Com- 
promise, which  admitted  Missouri  as  a  slave  State,  and  for- 
bade slavery  north  of  36°  30°  north  latitude.  To  balance 
Missouri  in  the  Senate,  Maine  was  admitted  at  the  same  time 
as  a  free  State. 

A  protective  tariff  had  been  devised  by  John  C.  Calhoun 
in  1816,  and  President  Monroe  strengthened  and  increased  the 
protection  accorded.  In  1819  he  purchased  Florida  from 
Spain;  and  in  1823,  in  consequence  of  the  war  made  by  Spain 
against  her  revolted  colonies  in  the  three  Americas,  be  voiced 
that  splendid  declaration  which  will  always  be  associated  with 
his  name — the  Monroe  Doctrine.  This  doctrine  briefly  is 
that  the  United  States  will  not  interfere  in  any  European  war, 
nor  will  it  permit  European  interference  or  European  control 
in  America,  North  or  South. 

No  better  proof  could  be  given  of  the  condition  of  parties 
than  the  election  which  ended  Monroe's  tenure  of  office.  The 
electoral  college  chose  a  Vice-President,  John  C.  Calhoun,  but 
its  vote  for  the  Presidency  was  so  scattered  between  Jackson, 
Adams,  Crawford  and  Clay  that  the  choice  was  thrown  into  the 
House.  Here,  by  an  alliance  of  the  friends  of  Clay  and  Adams, 
Jackson  was  defeated  and  JOHN  QUINCY  ADAMS 
(1825-1829)  became  the  sixth  President.  Clay  was  rewarded 
with  the  portfolio  of  State,  and  out  of  the  alliance  the  Whig1 
Party  was  formed.  Their  principles  were  in  part  those  of  the 
old  Federalists.  They  were  for  a  high  tariff  with  strong  pro- 
tection, and  they  early  declared  for  a  policy  of  internal  im- 
provements to  be  paid  for  by  the  nation  at  large.  Jackson's 
followers  took  the  place  of  the  old  Anti-Federalists;  they  were 
strict  constructionists,  opposed  to  the  tariff,  and  in  their  prin- 
ciples and  speeches  was  to  be  found  the  nucleus  of  the  States' 


A  History  of  American  Politics.  19 

rights  doctrine.  They  called  themselves  "Democrats.'' 
The  four  years  of  Adams'  presidency  were  passed  in  marshal- 
ing and  organizing  the  two  opposing  forces. 

ANDREW  JACKSON  (1829-1837),  the  seventh  Presi- 
dent, carried  everything  before  him.  The  electoral  vote  was 
178  to  83;  the  popular,  647,231  for  Jackson,  509,097  for 
Adams.  As  soon  as  he  had  taken  up  the  reins  of  power,  Jack- 
eon  removed  some  five  hundred  officeholders  from  their  places, 
on  Marcy's  famous  theory  that  "to  the  victors  belong 
the  spoils.'*  Upon  this  principle  the  tenure  of  political  office 
still  practically,  if  not  theoretically,  depends. 

The  Tariff  was  exceedingly  unpopular  at  the  South, 
which  was  then,  as  now,  an  agricultural  rather  than  a  manu- 
facturing region.  Several  States  had  protested,  and  in  1830 
Senator  Hayne  laid  down  the  doctrine  of  Nullification — 
that  any  State  could  declare  null  and  void  any  act  of  Congress. 
Webster  answered  this  declaration  in  the  debate  which  has 
since  been  famous.  The  original  discussion  was  not  on  the 
tariff  regulations,  but  on  the  sale  of  public  lands.  The  strug- 
gle was  a  hot  one.  Jackson  took  occasion  to  put  himself  on 
record  at  once  with  his  celebrated  toast,  "Our  Federal  Union, 
it  must  be  preserved."  The  words  were  first  uttered  at  a  din- 
ner in  honor  of  his  birthday.  Calhoun  took  the  opposite  view, 
and  in  1831  the  President's  cabinet  was  broken  up  by  the 
issue.  A  new  tariff  bill  was  passed,  but  the  South  was  still 
dissatisfied,  and  in  1832  South  Carolina  passed  the  Nullifica- 
tion ordinance.  Jackson  at  once  sent  a  naval  force  into 
Charleston  harbor,  and  Congress  passed  a  bill  enforcing  the 
tariff;  but  Henry  Clay  again  came  forward  with  a  compromise 
which  was  accepted  on  both  sides. 

The  United  States  Bank  was  the  next  bone»of  conten- 
tion. The  second  United  States  Bank  had  been  chartered  in 
1816  for  a  term  of  twenty  years.  Instead  of  re-chartering  the 
bank  in  1829, 1830, 1831  and  1832  General  Jackson  insisted  on 
the  Government  issuing  its  own  money,  making  its  own  ex- 
changes and  keeping  its  own  deposits.  But  Congress  sur- 
rendered to  the  money  power,  and  in  1832  re-chartered  the 
bank.  Jackson  vetoed:  the  bill,  declaring  that  under  the  Con- 


20  A  History  of  American  Politics, 

stitution  Congress  had  no  power  to  authorize  a  bank  corpora- 
tion to  issue  money,  but  that  the  currency  of  the  country 
should  consist  of  gold  and  silver  coins  and  Treasury  notes. 
The  friends  of  the  bank  tried  to  pass  the  bill  over  the  veto, 
but  failed.  The  bank,  however,  having  still  four  years  to  run, 
Jackson  ordered  his  Secretary  of  the  Treasury,  Duane,  to  re- 
move the  national  deposits  from  the  bank.  Duane  refusing, 
Jackson  dismissed  him  and  appointed  Taney  Secretary  of  the 
Treasury.  The  deposits  ceased.  The  Senate  at  once  passed  a 
vote  of  censure  on  the  President,  but  the  House  sustained 
Jackson  at  every  point  and  refused  a  new  charter.  The  fight 
with  the  Senate,  in  which  there  was  an  adverse  majority,  con- 
tinued until  the  end  of  Jackson's  term. 

Out  of  Jackson's  opposition  to  the  bank  grew  the  new 
Whig1  Party.  It  was  at  first  composed  principally  of  Na- 
tional Republicans,  the  Nullifiers,  the  Anti-Masons,  and  those 
Democrats  who  were  displeased  with  Jackson's  severe  meas- 
ures concerning  the  removal  of  Treasury  deposits  from  the 
United  States  Bank.  It  was  made  up,  perhaps,  a  good  deal  as 
the  People's  party  was  made  up  in  1892 — that  is,  of 
factions  and  shades  of  nearly  everything  opposed  to  "both  the 
old  parties." 

In  opposition  to  Jackson's  second  term  there  were  arrayed 
no  less  than  three  candidates — Henry  Clay,  National  Republi- 
can; John  Floyd,  Nullification,  and  William  Wirt,  Anti-Ma- 
sonic. Jackson  received  219  electoral  votes;  Clay,  49;  Floyd, 
11,  and  Wirt,  7. 

During  Jackson's  administration  was  the  first  weak  be- 
ginning of  the  Abolition  party.  The  Anti-Slavery  Society 
was  formed  in  1833.  It  was  the  target  for  abuse  and  violence, 
culminating  in  the  assassination  of  Love  joy.  Congress 
solemnly  declared  that  it  would  listen  to  no  petitions  upon 
the  question  of  slavery,  and  Jackson  asked  that  the  sending  of 
abolition  documents  through  the  mails  should  be  prohibited. 
This  the  Senate  refused. 

The  Democratic  candidate,  MARTIN"  VAN  BTJREN 
(1837-1841),  the  eighth  President,  was  elected  over  W.  H.  Harri- 


A  History  of  American  Politics.  21 

eon  and  several  other  opposition  nominees,  including  Daniel 
Webster. 

The  Great  Panic  of  1837  occurred  during  Van 
Buren's  administration.  Money  became  scarce  everywhere 
and  failures  were  most  frightfully  numerous.  Daniel  Webster 
ascribed  the  panic  to  the  interference  of  the  Government  with 
the  currency,  and  to  the  celebrated  "Specie  Circular,"  which 
demanded  that  public  lands  be  paid  for  in  specie  only.  On 
May  10,  1837,  all  the  New  York  banks  suspended,  but  Prof. 
W.  G.  Sumner,  of  Yale,  states,  in  his  "History  of  American 
Currency,"  that  "nearly  all  the  banks  made  money  out  of  the 
suspension  and  paid  big  dividends  during  the  year." 

In  1840  Van  Buren  was  renominated,  but  the  Whigs,  by 
an  attack  on  the  Democratic  financial  policy,  carried  the  coun- 
try and  elected  W.  H.  HARBISON  (1811)  the  ninth  Presi- 
dent. It  was  in  this  campaign  that  the  Abolitionists  produced 
their  first  national  platform,  which  favored  the  abolition  of 
slavery  in  the  District  of  Columbia  and  the  Territories.  In 
the  same  year  the  Democracy  at  Baltimore  resolved  that  Con- 
gress had  no  power  to  interfere  with  or  control  the  domestic 
institutions  of  the  several  States,  which  were  the  sole  and 
proper  judges, of  everything  pertaining  to  their  own  affairs  not 
prohibited  by  the  Constitution,  and  that  the  efforts  "by  Aboli- 
tionists or  others"  to  interfere  with  questions  of  slavery  were 
calculated  "to  lead  to  the  most  alarming  and  dangerous  conse- 
quences," "to  diminish  the  happiness  of  the  people  and  en- 
danger the  stability  and  permanence  of  the  Union,  and  ought 
not  to  be  countenanced  by  any  friend  of  our  political  institu- 
tions." The  convention  also  adopted  a  resolution  to  the  effect 
that  every  attempt  to  abridge  the  rights  or  privileges  of  for- 
eign-born citizens  should  be  resisted.  This  was  aimed  at  the 
Know-nothing  tendency  then  just  appearing,  which  had,  how- 
ever, no  affiliation  with  the  Abolition  movement,  already 
vigorous. 

Harrison  did  not  live  out  the  year,  and  he  was  succeeded 
by  the  Vice-President,  JOHX  TYLER  (1841-1845),  the  tenth 
President.  Tyler  rapidly  got  into  trouble  with  his  cabinet, 
which,  save  Webster,  deserted  him  on  issues  connected  with 


22  A  History  of  American  Politics. 

his  attempt  to  carry  out  Harrison's  financial  policy.  The 
slavery  question  was  pressing  forward  more  and  more  urgently 
for  solution  all  the  time.  An  Ohio  Congressman,  Giddings, 
brought  the  issue  into  the  House  of  Representatives,  and  was 
censured  by  that  body  for  so  doing.  He  resigned  and  was  at 
once  unanimously  re-elected.  A  new  tariff  bill  was  brought 
in,  and  the  proposition  then  made  for  a  division  of  the  surplus 
among  the  States. 

Finance,  protection,  internal  improvements,  and  indeed 
every  minor  issue,  had  to  give  way  to  the  great  puzzle  of 
slavery.  It  was  coming  on  for  adjustment,  and  no  hand  could 
stay  it.  In  the  campaign  of  1844  it  produced  the  dispute  over 
the  re-annexation  of  Texas.  The  Democratic  platform  de- 
clared the  Great  American  Measures — the  taking  in  of 
Texas  and  Oregon.  As  Texas  would  be  a  slave  territory,  the 
idea  was  antagonized  in  the  North,  but  after  a  close  and  per- 
plexed election  JAMES  K.  POLK  (1845-1849),  the  eleventh 
President,  was  elected.  Henry  Clay,  the  Whig  candidate,  was 
beaten  by  the  vote  of  62,300  which  was  given  to  Jas.  G.  Birney 
by  the  Liberty  party.  The  Democratic  and  Whig  parties 
were  silent  in  their  platforms  concerning  the  vexed  question 
of  slavery,  because  both  were  afraid  to  raise  the  question  for 
discussion  before  the  people.  They  treated  that  question 
much  as  the  Democratic  aud  Eepublican  parties  of  to-day 
treat  the  finance,  land  and  transportation  questions.  They 
ignored  the  only  living  question  of  the  day.  Although  the 
gallant  little  band  of  agitators,  known  as  the  Liberty  Party, 
received  but  an  insignificant  vote,  they  wero  sowing  seed  and 
spreading  light  for  the  future.  The  two  old  parties  ridiculed 
them,  but  they  struggled  on  under  the  motto,  "Duty  is  ours, 
results  are  God's." 

The  new  administration  at  once  took  up  the  Texas  matter, 
and  the  War  with  Mexico  was  the  necessary  consequence. 
It  is  here  necessary  merely  to  point  out  the  results.  By  the 
treaty  of  Guadalupe-Hidalgo,  the  United  States  acquired  all 
that  country  which  we  now  call  the  great  West,  including  the 
treasures  of  California  and  the  Sierras.  The  northwestern 
frontier  was  fixed  at  the  49th  degree  of  north  latitude,  and  the 


A  History  of  American  Politics. 

administration  closed  with  the  largest  accession  of  land  that 
had  yet  been  made  to  the  republic. 

The  Wilmot  Proviso  attempted  to  block  slavery  in  the 
new  territories,  and  Oregon  was  organized  as  free  soil.  A  low 
tariff  bill  was  passed,  and  the  Whigs  got  through  a  river  and 
harbor  bill  which  the  President  promptly  vetoed.  This 
brought  the  country  up  to  the  campaign  of  1848.  A  faction 
of  the  Democratic  party,  called  the  "Barnburners"  or  "Liber- 
als," bolted  the  national  convention  at  Baltimore,  and  subse- 
quently at  Utica,  New  York,  and  nominated  Martin  Van  Buren 
receiving  the  title  of  "Free  Soil"  Party,  owing  to  the  aboli- 
tion tone  of  its  platform.  The  Liberty  party  withdrew  its 
candidates,  Joh  a  P.  Hale  and  Leicester  King,  and  supported 
the  Free  Soil  ticket.  The  Whigs  nominated  Zach  Taylor,  and 
the  Democrats  Lewis  Cass.  As  in  the  previous  campaign, 
both  of  the  old  parties  ignored  the  slavery  question,  notwith- 
standing the  atmosphere  was  filled  with  ominous  murmurs  of 
discontent  and  revolution.  They  lauded  the  men  who  had 
taken  part  in  the  Mexican  war;  they  reiterated  the  declara- 
tions of  Jefferson,  and  Jackson,  and  Washington;  they  hinted 
at  the  tariff;  they  expressed  sympathy  with  the  struggling 
masses  in  monarchical  Europe — but  not  one  word  concerning 
the  institution  of  slavery. 

The  election  resulted  in  163  electoral  votes  for  ZACH- 
ARY  TAT  LOB  (twelfth  Paesident— 1849-50),  127  for  Cass, 
and  none  for  Van  Buren!  The  popular  vote  stood  1,360,101  for 
Taylor;  1,220,544  for  Cass,  and  291,263  for  Van  Buren. 

Though  not  an  abolitionist,  the  fact  that  President  Taylor 
called  into  private  council  Mr.  Seward  was  an  evidence  that 
he  had  no  sympathy  for  the  further  extension  of  slavery.  If 
not  the  avowed  enemy  of  slavery,  he  certainly  was  not  its 
friend.  Although  in  the  platform  and  during  the  compaign 
the  question  of  slavery  had  been  treated  by  both  Whigs  and 
Democrats  with  a  high-toned  and  disdainful  indifference,  it 
was  a  ghost  that  would  not  down.  Like  the  money  question 
of  to-day,  it  needed  constant  "tinkering"  to  keep  it  in  repair. 
No  sooner  was  a  small  leak  stopped  in  one  place  than  a  big 
one  started  in  another.  In  short,  the  irresistible  public  senti- 


24:  A  History  of  American  Politics. 

ment  of  the  North,  that  was  being  awakened  by  the  songs  of 
the  Hutchinsons,  the  newspaper  articles  of  Garrison,  the  fiery 
eloquence  of  Phillips,  the  ringing  poetical  effusions  of  Whit- 
tier,  was  the  upper  millstone  that  was  constantly  grinding 
upon  the  nether  millstone,  the  monstrous  wrong  known  as 
slavery;  and  between  the  two,  men,  parties  and  political  for- 
tunes were  ground  to  dust.  It  was  "in  the  air,"  and  sooner  or 
later  it  was  bound  to  gain  a  momentum  that  would  become  a 
whirlwind. 

Henry  Clay,  an  able  and  eloquent  man,  but,  like  all  ambi- 
tious politicians,  a  political  coward,  undertook  to  patch  up  a 
compromise.  He  introduced  a  series  of  eight  resolutions, 
which  provoked  a  debate  of  not  less  than  four  months.  As 
the  debate  extended  the  resolutions  increased  in  number,  so 
that  there  were  no  less  than  thirty-nine  of  them.  It  became 
known  as  the  Omnibus  Bill,  and  in  spite  of  the  best  efforts  of 
the  champions  of  compromise,  it  failed  to  pass.  However, 
what  was  called  the  "Compromise  of  185O"  was  patched 
up  and  passed.  It  provided  for  the  organization  of  N  ew  Mex- 
ico and  Utah  without  reference  to  slavery,  admitted  California 
as  a  free  State,  for  the  rendition  of  fugitive  slaves,  and  the 
abolition  of  slavery  in  the  District  of  Columbia!  It  proved 
but  a  sorry  piece  of  patchwork,  for  it  only  made  more  intense 
the  internal  fires  that  were  so  soon  to  burst  forth  in  all  their 
volcanic  fury. 

Upon  the  death  of  President  Taylor,  the  Vice-President, 
MILIjARD  FILLMORE  (1850-53),  had  became  the  thir- 
teenth President.  He  completely  changed  the  policy  of  his 
predecessor,  and  undertook  to  build  up  a  new  party  on  a 
"compromise  measure."  It  acquired  considerable  support  in 
New  York  under  the  name  of  "Silver  Gray,"  but  in  fact  "died 
bornin' " — simply  from  the  fact  that  it  is  as  impossible  to  build 
a  party  upon  "compromise  or  negative  principles"  as  it  is  to 
build  a  house  upon  sand. 

In  1852  the  American  or  "Know-Nothing"  party 
sprang  up.  It  was  based  upon  opposition  to  foreign-born  citi. 
zens  of  the  United  States.  Whether  or  not  it  was  the  result 
of  an  effort  by  the  friends  of  slavery  to  get  up  a  sort  of  side- 


A  History  of  American  Politics.  25 

show  to  divert  the  attention  of  the  public  from  the  main  ques- 
tion is  not  known,  but  it  seems  so  much  like  the  present  effort 
of  the  money-mongers  and  monopolists  to  excite  discussion 
upon  the  tariff  question  in  order  to  attract  the  attention  of 
the  people  from  vital  issues  that  it  is  altogether  probable. 

The  campaign  of  1852  is  similar  in  many  vital  points  to 
those  of  1880, 1884, 1888  and  1892.  The  Democrats  nominated 
Franklin  Pierce  and  declared  boldly  for  non-interference  with 
slavery  in  the  various  States,  and  especially  avowed  a  deter- 
mination to  enforce  the  law  of  1850  "reclaiming  fugitive  slaves." 
The  Whigs  nominated  Winfield  Scott,  "affirmed  and  ac- 
quiesced" in  the  "compromise  laws  of  1850,"  and  especially  the 
"fugitive  slave  law,"  and  (in  almost  the  identical  language  of 
the  Democratic  platform)  discountenanced  and  deprecated  any 
"further  agitation"  of  the  slavery  question.  The  Free  Soil 
party  nominated  John  P.  Hale  and  declared,  in  words  that 
rang  as  though  coming  from  the  rocky  summit  of  Mt.  Sinai, 
that  "slavery  is  a  sin  against  God,  a  crime  against-  man  which 
no  human  enactment  or  usage  could  make  right,  and  that 
Christianity,  humanity  and  patriotism  alike  demand  its  abo- 
lition." 

The  result  of  the  contest  was  that  FRANKLIN 
PIERCE  (1853-1857),  the  fourteenth  President,  was  elected. 
He  had  254  electoral  votes,  Scott  42,  and  Hale  NOT  ONE!  The 
popular  vote  was:  Pierce,  1,601,474;  Scott,  1,386,578,  and  Hale 
only  156,149. 

At  the  close  of  that  campaign  we  wonder  if  there  were  not 
men  who  sneered  at  the  vote  cast  for  Hale?  We  wonder  if 
there  were  not  men  who  declared  that  the  party  had  "died 
out"? 

How  similar  to  recent  campaigns  was  the  struggle  of  1852! 
Both  of  the  old  parties  got  down  upon  their  bellies  and  crawled 
in  the  dust  at  the  feet  of  the  arrogant  Slave  Power,  just  as 
of  late  years  both  old  parties  have  groveled  at  the  feet  of  the 
Money  Power  and  Monopoly. 

The  lesson  is  obvious.  The  Whig  party  was  killed  by  the 
campaign  of  1852.  And  history  repeats  itself. 

Soon  after  the  election  there  was  actual  fighting  on  the 


26  A  History  of  American  Politics. 

dividing  line  between  North  and  South.  Growing  bold  with 
apparent  success,  the  Slave  Power  began  an  aggressive  war- 
fare upon  the  free  soil  territory.  Douglas  reported  a  bill  to 
abrogate  the  "Missouri  Compromise"  of  1850,  and  permit 
the  people  of  new  States  to  adopt  the  institution  or  not,  as 
they  saw  fit.  This  opened  the  slavery  question  again.  De- 
bate ran  high.  The  compromise  of  1850  was  repealed.  It 
seemed  to  be  the  brand  which  kindled  the  flame  of  the  anti- 
slavery  fires.  In  the  spring  of  1854  a  new  party,  composed  of 
all  opposed  to  the  extension  of  slavery,  was  organized  in  many 
States.  It  was  called  the  Republican  Party.  During  the 
next  year,  1855,  it  grew  rapidly  in  numbers.  It  was  composed 
of  Free  Soilers,  Whigs,  anti-slavery  Democrats,  anti- Nebraska 
Democrats,  anti-slavery  Americans,  and,  in  short,  anti-almost- 
everything. 

Passions  were  at  fever  heat.  In  Kansas  the  "Jayhawkers" 
and  the  "Border  Ruffians"  were  already  at  each  other's  throats. 
It  was  plain  that  the  matter  in  dispute  could  only  be  settled 
by  an  appeal  to  the  arbitrament  of  arms. 

In  1856  the  Republicans  nominated  their  first  candidate, 
Gen.  John  C.  Fremont,  "the  Pathfinder."  Their  platform  re- 
cites that  the  convention  was  called  without  regard  to  previous 
political  differences,  to  enable  all  opposed  to  the  repeal  of  the 
Missouri  Compromise  to  come  together.  The  platform  op- 
posed the  extension  of  slavery  into  the  Territories;  declared 
that  Congress  should  prohibit  in  the  Territories  "the  twin 
relics  of  barbarism,  polygamy  and  slavery;"  and  opposed  all 
prescriptive  legislation,  thus  antagonizing  the  Democracy  on 
the  slavery  issue  and  the  Know-nothings  on  nativism.  The 
Whigs  met  at  Baltimore.  Their  platform  is  devoted  exclu- 
sively to  a  denunciation  of  "geographical  parties,"  and  a 
recommendation  of  Millard  Fillmore,  the  American  or  "Know- 
nothing"  candidate  for  President.  The  Democrats  added  lit- 
tle to  former  platforms,  save  that  they  declared  against  the 
"Know-nothings"  on  their  war  on  foreigners,  and  agreed  with 
them  in  their  declaration  against  intervention  with  slavery. 
They  nominated  and  elected  JAMES  BUCHANAN 
(1857-1861),  fifteenth  President.  Fremont,  however,  polled  a 


A  History  of  American  Politics.  27 

popular  vote  of  1341,264  against  Buchanan's  1,838,169,  while 
Fillmore  received  874,534. 

The  Dred  Scott  Case  now  came  on  to  exacerbate  still 
more  bitterly  public  feeling.  Chief  Justice  Taney  declared 
that  a  negro  was  a  chattel,  that  the  compromise  of  1850  was 
unconstitutional,  and  that  a  slave-owner  might  settle  with  his 
property  where  he  pleased,  in  any  territory.  Following  this 
came  John  Brown's  raid  into  Virginia — his  attempt  to  incite  a 
slave  insurrection,  and  his  death  upon  the  gallows.  There 
was  nothing  for  it  but  war,  and  into  war  the  country  rapidly 
drifted. 

The  campaign  of  1860  was  the  most  confused  in  the  whole 
history  of  American  politics.  There  was  talk  of  secession  in 
the  air.  There  was  notoriously  war  preparation  in  the  South. 
The  North  was  divided.  Every  man  felt  that  parties  would 
have  to  be  re-arranged  and  new  political  frontiers  defined. 
The  "Constitutional  Union"  party  met  at  Baltimore.  All  it  de- 
manded was  the  "Constitution  of  the  country,  the  union  of 
the  States,  and  the  enforcement  of  the  laws."  The  Republi- 
cans met  at  Chicago.  Their  platform  denounced  the  threats 
of  disunion  made  by  Democrats  in  Congress  as  an  "avowal  of 
contemplated  treason,"  which  it  was  the  duty  of  the  people  to 
"rebuke  and  forever  silence."  It  asserted  that  the  normal 
condition  of  all  the  Territories  of  the  United  States  is  that  of 
freedom;  that  the  reopening  of  the  slave  trade  was  a  crime 
against  humanity;  that  duties  should  be  adjusted  so  as  to  en- 
courage the  development  of  the  industrial  interests  of  the 
whole  country;  that  Congress  should  pass  a  complete  and 
satisfactory  homestead  law;  that  the  rights  of  citizenship  en- 
joyed by  foreigners  should  not  be  abridged  or  impaired;  that 
the  rights  of  all  citizens,  native  or  naturalized,  should  be  pro- 
tected abroad  and  at  home.  The  Douglas  Democratic  plat- 
form, adopted  at  Charleston,  favored  the  acquisition  of  Cuba; 
declared  that  State  legislatures  which  interfered  with  the  en- 
forcement of  the  fugitive  slave  law  were  revolutionary  and 
subversive  of  the  Constitution;  and  reaffirmed  the  Cincinnati 
platform  of  1856  on  tariff.  The  Breckinridge  platform,  adopted 
at  Charleston  and  Baltimore,  reaffirmed  the  Democratic  plat- 


28  A  History  of  American  Politics. 

form  adopted  at  Cincinnati,  with  certain  "explanatory  resolu- 
tions," which  in  substance  were  that  slave-owners  had  a  right 
"to  settle  with  their  property"  in  the  Territories  without  being 
interfered  with  by  Territorial  or  Congressional  legislation. 

On  these  issues  four  candidates  were  put  in  the  field. 
The  Republicans  nominated  Abraham  Lincoln;  the  Demo- 
crats, J.  C.  Breckinridge;  the  Constitutional  Union  party, 
John  Bell;  the  Independent  Democrats,  Stephen  A.  Douglas. 
ABRAHAM  LINCOLN  (1861-1865)  was  chosen  sixteenth 
President,  by  a  popular  vote  of  1,866,352;  Douglas  received 
1,375,157;  Breckinridge,  845,763;  Bell,  589,581. 

On  December  20, 1860,  South  Carolina  declared  that  the 
Union  was  dissolved,  and  a  Secession  resolution  was  passed. 
Following,  six  other  slave  States  immediately  seceded.  Every 
effort  was  made  to  stem  the  tide  of  disunion,  but  nothing 
could  be  done  save  with  arms  in  the  field.  A  peace  congress  met 
and  proved  futile.  The  Crittenden  compromis3  was  scoffed  out 
of  court.  The  Confederacy  was  formed  at  Montgomery,  Ala- 
bama, in  February,  1861,  with  Jefferson  Davis  as  President, 
and  slavery  and  low  tariff  as  its  corner-stone.  The  first  ball 
was  fired  April  14,  1861,  and  the  great  issue  of  the  century 
joined. 

For  the  time  politics  was  relegated  to  the  background. 
There  were  only  Unionists  and  Secessionists.  The  financing 
of  the  great  struggle  led  to  a  high  tariff,  the  issue  of  Treasury 
notes,  and  finally  the  establishment  of  the  national  banking 
system.  The  internal  revenue  system  was  developed,  an  in- 
come tax  was  imposed,  greenbacks  were  issued,  and  the  re- 
sources of  the  country  marshaled  to  meet  the  expenses  of  a 
war  that  cost  a  million  dollars  a  day. 

On  January  1, 1863,  President  Lincoln  issued  the  Eman- 
cipation Proclamation,  which  freed  the  Southern  slaves, 
and  marks  an  epoch  in  the  history  of  the  world.  Two  years 
later,  under  the  apple  tree  at  Appomattox,  Lee  surrendered  to 
Grant,  and  the  war  ended  with  the  complete  triumph  of  the 
Northern  arms.  There  had  in  the  meantime  been  another 
Presidential  election,  in  which  Lincoln  defeated  George  B. 
McClellan.  Shortly  after  Lee's  surrender  Lincoln  was  assas- 


A  History  of  American  Politics.  29 

sinated  by  J.  Wilkes  Booth,  an  actor,  and  ANDREW 
JOHNSON  (1865-1869),  the  seventeenth  President,  took  up 
the  chief  magistracy. 

The  problem  of  the  day  was  the  Reconstruction  of  the 
old  slave  States,  upon  which  the  new  President  and  his  party 
at  once  quarreled.  The  point  at  issue  was  the  proper  safe- 
guarding of  the  newly-freed  negro.  Congress  passed  the  Civil 
Rights  bill,  the  Freedman's  Bureau  bill,  and  submitted  the 
XIV th  Amendment  to  the  Constitution.  The  President  was 
finally  impeached  by  Congress,  but  his  trial  before  the  Senate 
resulted  in  an  acquittal  by  one  vote. 

ULYSSES  S.  GRANT  (1869-1877),  the  eighteenth 
President,  was  elected  over  Horatio  Seymour,  on  a  platform 
adopted  by  the  Republicans,  at  Chicago,  which  denounced  re- 
pudiation; favored  suffrage  on  equal  terms  to  all  men;  en- 
couraged immigration  and  declared  itself  in  sympathy  with 
all  oppressed  people  who  are  struggling  for  their  rights.  The 
Democratic  platform  of  1868  acknowledged  that  the  questions 
of  slavery  and  secession  had  been  forever  settled  by  the  war  or 
by  constitutional  conventions,  and  favored  amnesty  for  all  po- 
litical offenses.  It  made  a  very  distinct  pronouncement  on 
tariff  in  the  following  words:  "A  tariff  for  revenue  upon 
foreign  imports,  and  such  equal  taxation  under  the  internal 
revenue  laws  as  will  afford  incidental  protection  to  domestic 
manufactures,  and  as  will,  without  impairing  the  revenue, 
impose  the  least  burden  upon,  and  best  promote  and  encour- 
age, the  great  industrial  interests  of  the  country."  The  XVth 
Amendment,  guaranteeing  negro  suffrage,  was  passed  by  Con- 
gress in  1869.  After  the  campaign  of  1868  agitation  of  the  la- 
bor and  finance  questions  commenced.  An  attempt  was  made 
to  run  a  ticket  in  1872,  but  failed, 

A  Liberal  Republican  ticket,  with  Horace  Greeley  at  its 
head,  was  supported  by  the  united  opposition  against  Grant 
in  1872,  but  was  defeated  easily,  and  Greeley,  one  of  the 
greatest  figures  in  later  American  politics,  died  shortly  after- 
wards. The  South  was  pacified,  and  the  Treaty  of  "Wash- 
ington made,  which  involved  the  payment  of  the  Alabama 
claims  by  the  English  government.  It  was  during  the  first 


30  A  History  of  American  Politics. 

year  of  Gen.  Grant's  second  term  as  President  (1873),  that  a 
bill  was  passed  which,  while  scarcely  attracting  attention  at 
the  time,  has  proven  of  momentous  consequence  to  the  nation. 
It  bore  the  innocent  title,  "An  act  revising  and  amending  the 
laws  relative  to  the  mints,  assay  offices  and  coinage  of  the 
United  States."  This  act  demonetized  the  silver  dollar 
by  merely  omitting  that  coin  from  the  enumeration  of  the 
coins  of  the  United  States.  The  President  who  signed  the 
bill  and  many  of  the  Congressmen  who  voted  for  it  did  so  be- 
cause they  were  ignorant  of  its  real  character — among  them 
Hon.  W.  D.  Kelley,  chairman  of  the  Coinage  Committee.  Gar- 
field,  Blaine,  Voorhees  and  Conkling  afterwards  asserted  that 
they  did  not  know  that  the  bill  demonetized  silver.  No  party 
lines  were  drawn  in  the  vote  on  the  bill.  John  Sherman  in- 
troduced and  engineered  it.  His  name  will  stand  as  the 
synonym  for  infamy  when  the  American  people  understand 
the  nature  of  his  act.  The  greatP  aiiic  of  1 87 3  was  caused  by 
the  gradual  contraction  of  the  currency  which  culminated  in 
the  Sherman  crime  and  the  curtailment  of  bank  credits. 

In  1876  occurred  the  great  Hayes-Tilden  Contro- 
versy, which  tested  the  flexibility  of  our  electoral  machinery 
so  severely.  Tilden  was  the  Democratic  nominee,  and  he  had 
an  undoubted  popular  majority — 4,284,885,  against  4,033,950 
for  Hayes.  Rival  electors  claimed  to  have  been  elected  in 
Louisiana  and  Florida.  Intimidation,  fraud  and  illegal  vot- 
ing were  charged,  and  Congress  finally  appointed  the  Elec- 
toral Commission  to  settle  the  dispute,  as  there  was  noth- 
ing in  the  Constitution  to  cover  the  circumstances.  On  a 
party  vote  the  commission  awarded  the  disputed  electoral 
votes  to  the  Eepublican  candidate,  thus  making  RUTHER- 
FORD B.  HAYES  (1877-1881)  nineteenth  President  of  the 
United  States.  Curiously  enough,  Democratic  Governors 
were  declared  elected  in  the  States  whose  vote  was  in  question. 

The  Greenback  Party,  which  first  formally  organized 
in  Far  well  Hall,  Chicago,  Dec.  1, 1875,  nominated  Peter  Cooper 
for  the  Presidency  in  1876.  He  polled  81,740  votes. 

The  railroad  riots  of  1877  were  the  most  notable  fea- 
ture of  the  history  of  Hayes'  period  of  administration.  The 


A  History  of  American  Politics.  31 

silver  coinage  act  (Bland  bill)  was  passed  over  jHayes'  veto  in 

1878.  It  made  the  silver  dollar  full  legal  tender  and  provided 
for  the  coinage  of  not  less  than  two  millions  nor  more  than 
four  millions  per  month.    Specie  payment  was  resumed  in 

1879,  the  act  for  that  purpose  having  been  passed  by  Congress 
in  1875. 

In  the  presidential  campaign  of  1880  the  tariff  was  made 
the  leading  issue  between  the  Republican  and  Democratic 
parties.  The  Republican  candidate,  JAMES  A.  GAR- 
FIELD  (1881),  was  elected  twentieth  President  over  Win- 
field  Scott  Hancock,  Democrat,  and  James  B.  Weaver,  of  Iowa, 
Greenbacker.  Garfield  was  assasinated  by  a  madman,  Charles 
J.  Guiteau,  and  CHESTER  A.  ARTHUR  (1881-1885)  be- 
came the  twenty-first  President.  The  Pendleton  civil  service 
reform  bill  passed  during  his  administration.  The  general 
strike  of  telegraph  operators  in  1883  was  the  most  notable 
event  of  this  period. 

In  1884  GROVER  CLEVELAND  (1885-1889),  the 
first  Democrat  chosen  since  the  war,  was  elected  twenty-second 
President.  The  Republican  candidate  was  James  G.  Elaine, 
while  the  Greenback  standard  was  borne  by  Gen.  Benjamin  F. 
Butler,  and  J.  P.  St.  John  was  the  candidate  of  the  Prohibition 
party.  The  year  1886  was  notable  for  labor  agitations,  and 
the  Anarchist  trial  at  Chicago  attracted  the  attention  of  the 
whole  civilized  world.  The  Democratic  platform  of  1888  was 
the  result  of  Cleveland's  famous  tariff  reform  message  and 
made  the  tariff  practically  the  only  issue  between  the  two 
great  parties.  Cleveland  was  renominated  to  represent  the 
Democratic  idea  of  tariff  revision,  and  Benjamin  W.  Harrison 
represented  the  Republican  party  and  protection.  Fisk  was 
the  candidate  of  the  Prohibitionists  and  A.  W.  Streeter  was 
nominated  by  the  Union  Labor  Party,  which  practically 
took  the  place  of  the  Greenback  party.  The  result  was 
the  election  of  BENJAMIN  W.  HARRISON  (1889-1893), 
twenty-third  President,  he  receiving  a  majority  of  the  electoral 
vote,  although  Cleveland's  popular  vote  was  slightly  larger. 
The  election  also  changed  the  complexion  of  Congress,  enab- 


32  A  History  of  American  Politics. 

ling  the  Republicans  to  pass  what  is  known  as  the  McKinley 
tariff  bill. 

In  1892  the  Republicans  and  Democrats,  still  divided  only 
on  the  question  of  tariff,  put  up  the  same  candidates  who  had 
contended  for  the  Presidency  in  1888,  Harrison  and  Cleveland, 
both  contesting  for  a  second  term.  Bidwell  was  the  Prohibi- 
tionist candidate  and  Wing  represented  the  Socialist  Labor 
party.  The  great  political  event  of  1892  was  the  appearance  of 
the  People's  Party,  composed  of  all  the  various  reform  ele- 
ments except  extreme  radicals.  Its  first  convention  was  held 
at  Omaha  and  nominated  Gen.  James  B.  Weaver,  of  Iowa,  for 
President.  Its  platform  ignored  the  tariff  question  entirely, 
but  came  out  strong  for  reform  on  three  vital  issues — money, 
land  and  transportation.  The  People's  party  polled  over  a 
million  votes,  8.67  per  cent  of  the  entire  vote  cast.  While 
Cleveland's  election  was  not  unexpected,  the  fact  that  many 
States  hitherto  considered  unalterably  Republican  returned 
Democratic  electors  surprised  the  politicians.  The  Democrats 
came  into  power  in  1893  in  full  control  of  both  houses  of  Con- 
gress and  immediately  began  to  tinker  with  the  tariff,  finally 
evolving  a  new  schedule  out  of  what  was  originally  known  as 
the  Wilson  bill.  The  delay  of  both  houses  and  particularly 
the  action  of  the  Senate  on  the  bill  gave  rise  to  much  scandal, 
and  charges  of  corruption  were  openly  made  in  the  newspapers 
of  all  political  parties.  The  measure  as  finally  passed  was  un- 
satisfactory even  to  President  Cleveland,  who  neither  ap- 
proved nor  vetoed  the  bill,  but  allowed  it  to  become  a  law 
without  his  signature. 

The  money  panic  of  1893  and  the  continued  and  in- 
creasing business  depression  which  followed  did  not  turn  Con- 
gress from  its  tariff  folly,  and  no  measures  for  real  economic  or 
financial  reform  were  entertained.  The  novel  feature  of  the 
history  of  1894  was  what  is  known  as  the  Coxey  Commonweal 
movement — the  organized  march  of  armies  of  unemployed  to- 
ward the  capital  to  demand  legislation  for  relief. 

The  great  coal  strike  of  1894  began  in  April  and  was  pro- 
longed till  June,  ending  of  course  in  the  failure  of  the  strikers. 
The  famous  Pullman  boycott,  inaugurated  immediately  after 


A  History  of  American  Politics.  33 

the  termination  of  the  coal  troubles,  culminated  in  the  great 
railroad  strike  led  by  Eugene  V.  Debs,  president  of  the  Amer- 
ican Railway  Union.  The  storm-center  was  Chicago.  It 
added  only  another  proof  that  the  ballot  is  the  only  effective 
weapon  for  the  redress  of  labor's  grievances,  and  that  strikes 
and  boycotts  only  weaken  the  cause  of  labor.  President  Cleve- 
land's action  in  sending  Federal  troops  into  Chicago  in  spite 
of  the  protest  of  Governor  Altgeld,  and  in  violation  of  the  Con- 
stitution, is  final  proof  that,  so  far  as  essential  principles  are 
concerned,  the  Democratic  party  has  drifted  away  from  its  tra- 
ditions, and  that  the  Tory  principles  of  early  days  prevail  in 
both  the  old  parties.  The  conviction  of  Debs  and  his  asso- 
ciates for  contempt  of  court  and  the  denial  to  them  of  the  right 
of  trial  by  jury  were  the  culmination  of  Federal  usurpation  of 
power. 

In  the  fall  election  of  1894  the  Republicans  were  success- 
ful, wiping  out  the  Democratic  majority  in  Congress.  The 
People's  party  showed  a  remarkable  increase  in  strength. 
While  the  total  vote  of  all  parties  was  nearly  a  million  less 
than  that  of  1892,  the  Populists  showed  a  gain  of  45  per  cent. 

The  recent  action  of  Congress  —  or  rather  inaction  —  on  the 
money  question,  and  Cleveland's  unauthorized  issue  of  interest- 
bearing  gold  bonds,  will  be  taken  up  fully  in  other  departments 
of  this  book. 


"  THIS  land  o'  ourn,  I  tell  ye,  's  got  to  be 
A  better  country  than  man  ever  see; 
I  feel  my  sperit  swellin'  with  a  cry 
That  seems  to  say,  'Break  forth  and  prophesy!' 
O  strange  New  World,  that  yet  wast  never  young-, 
Whose  youth  from  thee  by  gripin'  want  was  wrung1, 
Brown  foundlin'  o'  the  woods,  whose  baby  bed 
Was  prowled  'round  by  the  Injun's  cracklin'  tread, 
An'  who  grew'st  strong  thro'  shifts  an'  wants  an'  pains, 
Nursed  by  stern  men  with  empires  in  their  brains." 

—  James  Russell  Lowell, 

"A  WIDOW  goes  out  into  the  fields  to  gather  nettles  for  her 
children's  dinner.  My  lord  in  the  Bull's-eye  tavern  takes 
every  third  nettle  and  calls  it  rent."—  Carlyle. 


"  Give  me  liberty  or  give  me  death. 

—PATRICK  HENRY. 


THE  STEPS  IN  THE  GROWTH  OF  AMERICAN  LIBERTY. 

^ 
Magna  Charta. 

Tif  EARLY  seven  hundred  years  ago  was  organized  a  movement 
*^"  which  resulted  in  the  great  charter  of  English  liberty — a 
movement  which  foreshadowed  the  battle  of  our  American  fore- 
fathers for  political  independence.  On  the  25th  of  August, 
1213,  the  prelates  and  Barons,  tiring  of  the  tyranny  and  vacil- 
lation of  King  John,  formed  a  council  and  passed  measures  to 
secure  their  rights.  After  two  years  of  contest,  with  many 
vicissitudes,  the  Barons  entered  London  and  the  King  fled  into 
Hampshire.  By  agreement  both  parties  met  at  Runnymede 
on  the  9th  of  June,  1215,  and  after  several  days'  debate,  on 
June  15,  Magna  Charta  (the  Great  Charter),  the  glory  of  Eng- 
land, was  signed  and  sealed  by  the  sovereign.  The  Magna 
Charta  is  a  comprehensive  bill  of  rights,  and,  though  crude  in 
form,  and  with  many  clauses  of  merely  local  value,  its  spirit 
still  lives  and  will  live.  Clear  and  prominent  we  find  the 
motto,  "No  tax  without  representation."  The  original  docu- 
ment is  in  Latin  and  contains  sixty -one  articles,  of  which  the 
39th  and  40th,  embodying  the  very  marrow  of  our  own  State 
constitutions,  are  here  given  as  translated  in  the  English 
statutes: 

"39.  No  freeman  shall  be  taken  or  imprisoned  or  be 
disseised  of  his  freehold,  or  liberties  or  free  customs,  or  be 
otherwise  destroped  [damaged],  nor  will  we  press  upon  him 
nor  seize  upon  him  [condemn  him]  but  by  lawful  judgment  of 
his  peers  or  by  the  law  of  the  land. 

"40.  We  will  sell  to  no  man,  we  will  not  deny  or  defer  to 
any  man,  either  right  or  justice." 

The  Great  Charter  recognizes  a  popular  tribunal  as  a 
check  on  the  official  judges  and  may  be  looked  upon  as  the 
foundation  of  the  writ  of  Habeas  Corpus.  It  provides  that  no 
one  is  to  be  condemned  on  rumor  or  suspicion,  but  only  on  the 
evidence  of  witnesses.  It  affords  protection  against  excessive 
emercetnents,  illegal  distresses  and  various  processes  for  debts 

34 


Steps  in  the  Grcnvth  of  American  Liberty  35 

and  services  due  to  the  crown.  Pines  are  in  all  cases  to  be 
proportionate  to  the  magnitude  of  the  offense,  and  even 
the  villein  or  rustic  is  not  to  be  deprived  of  his  necessary  chat- 
tels. There  are  provisions  regarding  the  forfeiture  of  land  for 
felony.  The  testamentary  power  of  the  subject  is  recognized 
over  part  of  his  personal  estate,  and  the  rest  to  be  divided  be- 
tween his  widow  and  children.  The  independence  of  the 
church  is  also  provided  for.  These  are  the  most  important 
features  of  the  Great  Charter,  which,  exacted  by  men  with 
arms  in  their  hands  from  a  resisting  king,  occupies  so  conspic- 
uous a  place  in  history,  which  establishes  the  supremacy  of 
the  law  of  England  over  the  will  of  the  monarch,  and  which 
still  forms  the  basis  of  English  liberties. 


The  Mecklenburg  Declaration. 

TVl  ORE  than  a  year  before  the  signing  of  the  Declaration  of 
{.*•*  Independence  a  document  was  drawn  up  that  was  almost 
a  model  in  phraseology  and  sentiment  of  the  great  charter  of 
American  freedom.  There  are  various  accounts  of  this  matter, 
but  the  most  trustworthy  is  this: 

At  a  public  meeting  of  the  residents  of  Mecklenburg 
County,  North  Carolina,  held  at  Charlotte  on  the  20th  of  May, 
1775,  it  was 

"Resolved,  That  whenever  directly  or  indirectly  abetted, 
or  in  any  way,  form  or  manner  countenanced,  the  unchartered 
and  dangerous  invasion  of  our  rights,  as  claimed  by  Great 
Britain,  is  an  enemy  to  our  country  —  to  America  —  and  to  the 
inherent  and  inalienable  rights  of  man. 

"Resolved,  That  we,  the  citizens  of  Mecklenburg  County, 
do  hereby  dissolve  the  political  bonds  which  have  connected 
us  to  the  mother  country,  and  hereby  absolve  ourselves  from 
all  allegiance  to  the  British  crown,  and  abjure  all  political  con- 
nection, contract  or  association  with  that  nation,  which  has 
wantonly  trampled  on  our  rights  and  liberties,  and  inhumanly 
shed  the  blood  of  American  patriots  at  Lexington. 

"Resolv  d,  That  we  do  hereby  declare  ourselves  a  free  and 
independent  people:  are  and  of  right  ought  to  be  a  sovereign 
and  self-governing  association,  under  the  control  of  no  power 
other  than  that  of  our  God  and  the  general  government  of  the 
Congress.  To  the  maintenance  of  which  independence  we 


86  Steps  in  the  Growth  of  American  Liberty. 

solemnly  pledge  to  each  other  our  mutual  co-operation,  our 
lives,  our  fortunes,  and  our  sacred  honor." 

There  are  two  other  resolutions,  concerning  the  militia 
and  the  administration  of  the  law,  but  these,  having  no  present 
value,  are  here  omitted. 

•^ 

The  Declaration  of  Independence. 
In  Congress,  July  4,  1776. 

luif  HEN,  in  the  course  of  human  events,  it  becomes  necessary 
**  for  one  people  to  dissolve  the  political  bonds  which  have 
connected  them  with  another,  and  to  assume,  among  the  pow- 
ers of  the  earth,  the  separate  and  equal  station  to  which  the 
laws  of  Nature  and  Nature's  God  entitle  them,  a  decent  re- 
spect to  the  opinions  of  mankind  requires  that  they  should 
declare  the  causes  which  impel  them  to  the  separation. 

We  hold  these  truths  to  be  self-evident:  that  all  men  are 
created  equal;  that  they  are  endowed  by  their  Creator  with 
certain  inalienable  rights ;  that  among  these  are  life,  liberty, 
and  the  pursuit  of  happiness.  That  to  secure  these  rights, 
governments  are  instituted  among  men,  deriving  their  just 
powers  from  the  consent  of  the  governed;  that  whenever  any 
form  of  government  becomes  destructive  of  these  ends,  it  is  the 
right  of  the  people  to  alter  or  to  abolish  it,  and  to  institute  a 
new  government,  laying  its  foundation  on  such  principles,  and 
organizing  its  powers  in  such  form  as  to  them  shall  seem  most 
likely  to  effect  their  safety  and  happiness.  Prudence, 
indeed,  will  dictate  that  governments  long  established  should 
not  be  changed  for  light  and  transient  causes;  and  accordingly 
all  experience  has  shown  that  mankind  are  more  disposed  to 
suffer*  while  evils  are  sufferable,  than  to  right  themselves  by 
abolishing  the  forms  to  which  they  are  accustomed.  But 
when  a  long  train  of  abuses  and  usurpations,  pursuing  invari- 
ably the  same  object,  evinces  a  design  to  reduce  them  under 
absolute  despotism,  it  is  their  right,  it  is  their  duty,  to  throw 
off*such  government,  and  to  provide  new  guards  for  their  fu- 
ture security.  Such  has  been  the  patient  sufferance  of  these 
colonies,  and  such  is  now  the  necessity  which  constrains  them 
to  alter  their  former  systems  of  government.  The  history  of 
the  present  King  of  Great  Britain  is  a  history  of  repeated  in- 
juries and  usurpations,  all  having  in  direct  object  the  estab- 
lishment of  an  absolute  tyranny  over  these  States.  To  prove 
this,  let  facts  be  submitted  to  a  candid  world. 

He  has  refused  his  assent  to  laws  the  most  wholesome  and 
necessary  for  the  public  good. 


Steps  in  the  Growth  of  American  Liberty.  37 

He  has  forbidden  his  governors  to  pass  laws  of  immediate 
and  pressing  importance,  unless  suspended  in  their  operation 
till  his  assent  should  be  obtained ;  and  when  so  suspended,  he 
has  utterly  neglected  to  attend  to  them. 

He  has  refused  to  pass  other  laws  for  the  accommodation 
of  large  districts  of  people,unless  those  people  would  relinquish 
the  right  of  representation  in  the  legislature— a  right  ines- 
timable to  them,  formidable  to  tyrants  only. 

He  has  called  together  legislative  bodies  at  places  unusual, 
uncomfortable,  and  distant  from  the  depository  of  their  public 
records,  for  the  sole  purpose  of  fatiguing  them  into  compliance 
with  his  measures. 

He  has  dissolved  representative  houses  repeatedly,  for  op- 
posing with  manly  firmness  his  invasions  on  the  rights  of  the 
people. 

He  has  refused,  for  a  long  time  after  such  dissolutions,  to 
cause  others  to  be  elected;  whereby  the  legislative  powers,  in- 
capable of  annihilation,  have  returned  to  the  people  at  large, 
for  their  exercise,  the  state  remaining,  in  the  meantime,  ex- 
posed to  all  the  dangers  of  invasion  from  without,  and  convul- 
sions within. 

He  has  endeavored  to  prevent  the  population  of  these 
States;  for  that  purpose  obstructing  the  laws  for  naturalization 
of  foreigners,  refusing  to  pass  others  to  encourage  their  migra- 
tion hither,  and  raising  conditions  of  new  appropriation  of 
lands. 

He  has  obstructed  the  administration  of  justice,  by  refus- 
ing his  assent  to  laws  establishing  judiciary  powers. 

He  has  made  judges  dependent  on  bis  will  alone  for  the 
tenure  of  their  offices  and  the  amount  and  payment  of  their 
salaries. 

He  has  erected  a  multitude  of  new  offices,  and  sent  hither 
swarms  of  officers,  to  harass  our  people,  and  to  eat  out  their 
substance. 

He  has  kept  among  us,  in  times  of  peace,  standing  armies, 
without  the  consent  of  our  legislatures. 

He  has  affected  to  render  the  military  independent  of,  and 
superior  to,  the  civil  power. 

He  has  combined  with  others  to  subject  us  to  a  jurisdic- 
tion foreign  to  our  constitution,  and  unacknowledged  by  our 
laws;  giving  his  assent  to  their  acts  of  pretended  legislation: 

For  quartering  large  bodies  of  armed  troops  among  us. 

For  protecting  them,  by  mock  trial,  from  punishment  for 
any  murders  which  they  should  commit  on  the  inhabitants  of 
these  States. 

For  cutting  off  our  trade  with  all  parts  of  the  world. 

For  imposing  taxes  on  us  without  our  consent. 


38  Steps  in  the  Growth  of  American  Liberty. 

For  depriving  us,  in  many  cases,  of  the  benefits  of  trial  by 
jury. 

For  transporting  us  beyond  the  seas  to  be  tried  for  pre- 
tended offenses. 

For  abolishing  the  free  system  of  English  laws  in  a  neigh- 
boring province,  establishing  therein  an  arbitrary  government, 
and  enlarging  its  boundaries,  so  as  to  render  it  at  once  an  ex- 
ample and  fit  instrument  for  introducing  the  same  absolute 
rule  into  these  colonies. 

For  taking  away  our  charters,  abolishing  our  most  valu- 
able laws,  and  altering,  fundamentally,  the  forms  of  our  gov- 
ernments. 

For  suspending  our  own  legislatures  and  declaring  them- 
selves invested  with  power  to  legislate  for  us  in  all  cases  what- 
soever. 

He  has  abdicated  government  here,  by  declaring  us  out  of 
his  protection,  and  waging  war  against  us. 

He  has  plundered  our  seas,  ravaged  our  coasts,  burnt  our 
towns,  and  destroyed  the  lives  of  our  people. 

He  is,  at  this  time,  transporting  large  armies  of  foreign 
mercenaries,  to  complete  the  works  of  death,  desolation  and 
tyranny,  already  begun  with  circumstances  of  cruelty  and  per- 
fidy scarcely  paralleled  in  the  most  barbarous  ages,  and  totally 
unworthy  the  head  of  a  civilized  nation. 

He  has  constrained  our  fellow-citizens,  taken  captive  on 
the  high  seas,  to  bear  arms  against  their  country,  to  become 
the  executioners  of  their  friends  and  brethren,  or  to  fall  them- 
selves by  their  hands. 

He  has  excited  domestic  insurrection  among  us,  and  has 
endeavored  to  bring  on  the  inhabitants  of  our  frontiers  the 
merciless  Indian  savages,  whose  known  rule  of  warfare  is  an 
undistinguished  destruction  of  all  ages,  sexes  and  conditions. 

In  every  stage  of  these  oppressions  we  have  petitioned 
for  redress  in  the  most  humble  terms;  our  repeated  petitions 
have  been  answered  only  by  repeated  injury.  A  prince  whose 
character  is  thus  marked  by  every  act  which  may  define  a 
tyrant  is  unfit  to  be  the  ruler  of  a  free  people. 

Nor  have  we  been  wanting  in  attention  to  our  British 
brethren.  We  have  warned  them,  from  time  to  time,  of  at- 
tempts by  their  legislature  to  extend  an  unwarrantable  juris- 
diction over  us.  We  have  reminded  them  of  the  circum- 
stances of  our  emigration  and  settlement  here.  We  have  ap- 
pealed to  their  native  justice  and  magnanimity;  and  we  have 
conjured  them,  by  the  ties  of  our  comtuon  kindred,  to  disavow 
these  usurpations,  which  would  inevitably  interrupt  our  con- 
nection and  correspondence.  They,  too,  have  been  deaf  to  the 
voice  of  justice  and  of  consanguinity.  We  must,  therefore,  ac- 


Steps  in  the  Growth  of  American  Liberty.  39 

quiesce  in  the  necessity  which  denounces  our  separation,  and 
hold  them,  as  we  hold  the  rest  of  mankind,  enemies  in  war,  in 
peace  friends. 

We,  therefore,  the  representatives  of  the  United  States  of 
A  merica,  in  general  Congress  assembled,  appealing  to  the  su- 
preme Judge  of  the  world  for  the  rectitude  of  our  intentions, 
do,  in  the  name  and  by  the  authority  of  the  good  people  of 
these  colonies,  solemnly  publish  and  declare  that  these  United 
Colonies  are,  and  of  right  ought  to  be,  free  and  independent 
States;  that  they  are  absolved  from  all  allegiance  to  the 
British  crown,  and  that  all  political  connection  between  them 
and  the  state  of  Great  Britain  is,  and  ought  to  be,  totally  dis- 
solved; and  that,  as  free  and  independent  States,  they  have 
full  power  to  levy  war,  conclude  peace,  contract  alliances,  es- 
tablish commerce  and  to  do  all  other  acts  and  things  which 
independent  States  may  of  right  do.  And  for  the  support  of 
this  declaration,  with  a  firm  reliance  on  the  Protection  of  Di- 
vine Providence,  we  mutually  pledge  to  each  other  our  lives, 
our  fortunes  and  our  sacred  honor. 

The  foregoing  declaration  was,  by  order  of  the  Congress, 
engrossed,  and  signed  by  the  following  members: 

JOHN  HANCOCK. 

New  Hampshire — Josiah  Bartlett,  William  Whipple,  Mat- 
thew Thornton. 

Massachusetts  Bay— Samuel  Adams,  John  Adams,  Robert 
Treat  Paine,  Elbridge  Gerry. 

Rhode  Island — Stephen  Hopkins,  William  Ellery. 

Connecticut — Roger  Sherman,  Samuel  Huntington,  Wil- 
liam Williams,  Oliver  Wolcott. 

New  York — William  Floyd,  Philip  Livingston,  Francis 
Lewis,  Lewis  Morris. 

New  Jersey — Richard  Stockton,  John  Witherspoon,  Fran- 
cis Hopkinson,  John  Hart,  Abraham  Clark. 

Pennsylvania — Robert  Morris,  Benjamin  Rush,  Benjamin 
Franklin,  John  Morton,  George  Clymer,  James  Smith,  George 
Taylor,  James  Wilson,  George  Ross. 

Delaware — Caesar  Rodney,  George  Read,  Thomas  McKean. 

Maryland — Samuel  Chase,  William  Paco,  Thomas  Stone, 
Charles  Carroll  of  Carroll  ton. 

Virginia — George  Wythe,  Richard  Henry  Lee,  Thomas 
Jefferson,  Benjamin  Harrison,  Thomas  Nelson,  Jr.,  Francis 
Lightfoot  Lee,  Carter  Braxton. 

-North  Carolina — William  Hooper,  Joseph  Hewes,  John 
Penn. 


40  Steps  in  the  Growth  of  American  Liberty. 

South  Carolina—  Edward  Rutledge,  Thomas  Heyward,  Jr. 
Thomas  Lynch,  Jr.,  Arthur  Middleton. 

Georgia—  Button  Gwinnett,  Lyman  Hall,  George  Walton. 

The  following  clause  formed  part  of  the  original  Declara- 
tion of  Independence  as  signed,  but  was  finally  left  out  of  the 
printed  copies  "out  of  respect  to  South  Carolina'': 

"He  [King  George  III.]  has  waged  cruel  war  against  hu- 
man nature  itself,  violating  its  most  sacred  rights  of  life  and 
liberty  in  the  persons  of  a  distant  people  who  never  offended 
him,  captivating  and  carrying  them  into  slavery  in  another 
hemisphere  or  to  incur  miserable  death  in  their  transportation 
thither.  This  piratical  warfare,  the  opprobrium  of  infidel 
powers,  is  the  warfare  of  the  Christian  King  of  Great  Britain. 
Determined  to  keep  a  market  where  men  should  be  bought 
and  sold,  he  has  at  length  prostituted  his  negative  for  sup- 
pressing any  legislative  attempt  to  prohibit  and  restrain  this 
execrable  commerce." 


Jefferson's  Political  Policy. 

1.  Legal  equality  of  all  human  beings.  2.  The  people  the 
only  source  of  power.  3.  No  hereditary  offices,  nor  order 
of  "nobility,"  nor  title.  4.  No  unnecessary  taxation.  5.  No 
national  banks  or  bonds.  6.  No  costly  splendor  of  adminis- 
tration. 7.  Freedom  of  thought  and  discussion.  8.  Civil 
authority  superior  to  the  military.  9.  No  favored  classes; 
no  special  privileges;  no  monopolies.  10.  Free  and  fair 
elections;  universal  suffrage.  11.  No  public  money  spent 
without  warrant  of  law.  12.  No  mysteries  in  government 
hidden  from  the  public  eye.  13.  Representatives  bound  by 
the  instructions  of  their  constituents.  14.  The  Constitution 
of  the  United  States  a  special  grant  of  powers  limited  and 
definite.  15.  Freedom,  sovereignty  and  independence  of 
the  respective  States.  16.  Absolute  severance  of  Church 
and  State.  17.  The  Union  a  compact  —  not  a  consolidation 
nor  a  centralization.  18.  Moderate  salaries,  economy  and 
strict  accountability.  19.  Gold  and  silver  currency  —  sup- 
plemented by  treasury  notes  bearing  no  interest  and  bot- 
tomed on  taxes.  20.  No  State  banks  of  issue.  21.  No  ex- 
pensive navy  or  diplomatic  establishment.  22.  A  progress- 
ive or  graduated  tax  laid  upon  wealth.  23.  No  internal 
revenue  system.  A  complete  separation  of  public  moneys 
from  bank  funds. 


V  "70  secure  the  blessings  of  liberty  to  ourselves  and  our  posterity  ." 


THE  CONSTITUTION  OF  THE  UNITED  STATES. 


PREAMBLE. 

\A?  E,  the  people  of  the  United  States,  in  order  to  form  a  more 
**  perfect  union,  establish  justice,  insure  domestic  tran- 
quillity, provide  for  the  common  defense,  promote  the  general 
welfare,  and  secure  the  blessings  of  liberty  to  ourselves  and 
our  posterity,  do  ordain  and  establish  this  Constitution  for  the 
United  States  of  America. 

ARTICLE  I. 

SECTION  I.  1.  All  legislative  powers  herein  granted  shall 
be  vested  in  a  Congress  of  the  United  States,  which  shall  con- 
sist of  a  Senate  and  House  of  Representatives. 

SECTION  II.  1.  The  House  of  Representatives  shall  be 
composed  of  members  chosen  every  second  year  by  the  people 
of  the  several  States;  and  the  electors  in  each  State  shall  have 
the  qualifications  requisite  for  electors  of  the  most  numerous 
branch  of  the  State  legislature. 

2.  No  person  shall  be  a  representative  who  shall  not  have 
attained  to  the  age  of  twenty-five  years,  and  been  seven  years 
a  citizen  of  the  United  States,  and  who  shall  not,  when  elected, 
be  an  inhabitant  of  that  State  in  which  he  shall  be  chosen. 

3.  Representative  and  direct  taxes  shall  be  apportioned 
among  the  several  States  which  may  be  included  within  this 
Union,  according  to  their  respective  numbers,  which  shall  be 
determined  by  adding  to  the  whole  number  of  free  persons, 
including  those  bound  to  service  for  a  term  of  years,  and  ex- 
cluding Indians  not  taxed,  three-fifths  of  all  other  persons. 
The  actual  enumeration  shall  be  made  within  three  years 
after  the  first  meeting  of  the  Congress  of  the  United  States, 
and  within  every  subsequent  term  of  ten  years,  in  such  man- 
ner as  they  shall  by  law  direct.    The  number  of   representa- 
tives shall  not  exceed  one  for  every  thirty  thousand,  but  each 
State  shall  have  at  least  one  representative;  and  until  such 
enumeration  shall  be  made,  the  State  of  New  Hampshire  shall 
be   entitled  to    choose  three;  Massachusetts,  eight;  Rhode 
Island  and  Providence  Plantations,  one;  Connecticut,  five;  New 
York,  six;  New  Jersey,  four;  Pennsylvania,  eight;  Delaware,  one; 
Maryland,  six;  Virginia,  ten;  North  Carolina,  five;  South  Caro- 
lina, five,  and  Georgia,  three. 

4.  When  vacancies  happen  in  the  representation  from  any 
State,  the  executive  authority  thereof  shall  issue  writs  of  elec- 
tion to  fill  such  vacancies. 

41 


42  The  Constitution  of  the  United  States. 

5.  The  House  of  Representatives  shall  choose  their 
speaker  and  other  officers;  and  shall  have  the  sole  power  of 
impeachment. 

SECTION  III.  1.  The  Senate  of  the  United  States  shall 
be  composed  of  two  senators  from  each  State,  chosen  by  the 
legislature  thereof,  for  six  years;  and  each  senator  shall  have 
one  vote. 

2.  Immediately  after  they  shall  be  assembled  in  conse- 
quence of  the  first  election,  they  shall  be  divided  as  equally  as 
may  be  into  three  classes.    The  seats  of  the  senators  of  the 
first  class  shall  be  vacated  at  the  expiration  of  the  second  year, 
of  the  second  class  at  the  expiration  of  the  fourth  year,  and  of 
the  third  class  at  the  expiration  of  the  sixth  year,  so  that  one- 
third  may  be  chosen  every  second  year;  and  if  vacancies  happen 
by  resignation,  or  otherwise,  during  the  recess  of  the  legisla- 
ture of  any  State,  the  executive  thereof  may  make  temporary 
appointments  until  the  next  meeting  of  the  legislature,  which 
shall  then  fill  such  vacancies. 

3.  No  person  shall  be  a  senator  who  shall  not  have  at- 
tained to  the  age  of  thirty  years,  and  been  nine  years  a  citizen 
of  the  United  States,  and  who  shall  not,  when  elected,  be  an 
inhabitant  of  that  State  for  which  he  shall  be  chosen. 

4.  The  Vice -President  of  the  United  States  shall  be  pres- 
ident of  the  Senate,  but  shall  have  no  vote  unless  they  be 
equally  divided. 

5.  The  Senate  shall  choose  their  other  officers,  and  also 
a  president  pro  tempore,  in  the  absence  of  the  Vice-President, 
or  when  he  shall  exercise  the  office  of  President  of  the  United 
States. 

6.  The  Senate  shall  have  the  sole  power  to  try  all  im- 
peachments.    When  sitting  for  that  purpose  they  shall  be  on 
path  or  affirmation.    When  the  President  of  the  United  States 
is  tried,  the  Chief  Justice  shall  preside;  and  no  person  shall  be 
convicted  without  the  concurrence  of  two-thirds  of  the  mem- 
bers present. 

7.  Judgment,  in  cases  of  impeachment,  shall  not  extend 
further  than  to  removal  from  office,  disqualification  to  hold 
and  enjoy  any  office  of  honor,  trust  or  profit  under  the  United 
States;  but  the  party  convicted  shall  nevertheless  be  liable  and 
subject  to  indictment,  trial,  judgment  and  punishment,  ac- 
cording to  law. 

SECTION  IV.  1.  The  times,  places  and  manner  of  holding 
elections  for  senators  and  representatives  shall  be  prescribed 
in  each  State  by  the  legislature  thereof;  but  the  Congress  may 
at  any  time  by  law  make  or  alter  such  regulations,  except  as 
to  the  places  of  choosing  senators. 

2.    The  Congress  shall  assemble  at  least  once  in  every 


The  Constitution  of  the  United  States.  43 

year;  and  such  meeting  shall  be  on  the  first  Monday  in  Decem- 
ber, unless  they  shall  by  law  appoint  a  different  day. 

SECTION  V.  1.  Each  house  shall  be  the  judge  of  the  elec- 
tion, returns  and  qualifications  of  its  own  members,  and  a  ma- 
jority of  each  shall  constitute  a  quorum  to  do  business;  but  a 
smaller  number  may  adjourn  from  day  to  day  and  may  be  au- 
thorized to  compel  the  attendance  of  absent  members,  in  such 
manner  and  under  such  penalties  as  each  house  may  provide. 

2.  Each  house  may  determine  the  rules  of  its  proceed- 
ings, punish  its  members  for  disorderly  behavior,  and,  with 
the  concurrence  of  two-thirds,  expel  a  member. 

5.  Each  house  shall  keep  a  journal  of  its  proceedings,  and 
from  time  to  time  publish  the  same,  excepting  such  parts*  as 
in  their  judgment  require  secrecy;  and  the  yeas  and  nays  of 
the  members  of  either  house  on  any  question  shall,  at  the  de- 
sire of  one-fifth  of  those  present,  be  entered  on  the  journal. 

4.  Neither  house,  during  the  session  of  Congress,  shall, 
without  the  consent  of  the  other,  adjourn  for  more  than  three 
days,  nor  to  any  other  place  than  that  in  which  the  two  houses 
shall  be  sitting. 

SECTION  VI.  1.  The  senators  and  representatives  shall 
receive  a  compensation  for  their  services,  to  be  ascertained  by 
law,  and  paid  out  of  the  treasury  of  the  United  States.  They 
shall,  in  all  cases,  except  treason,  felony,  and  breach  of  peace, 
be  privileged  from  arrest  during  their  attendance  at  the  ses- 
sion of  their  respective  houses,  and  in  going  to  and  returning 
from  the  same;  and  for  any  speech  or  debate  in  either  house 
they  shall  not  be  questioned  in  any  other  place. 

2.  No  senator  or  representative  shall,  during  the  time  for 
which  he  \vas  elected,  be  appointed  to  any  civil  office  under 
the  authority  of  the  United  States,  which  shall  have  been 
created,  or  the  emoluments  whereof  shall  have  been  increased, 
during  such  time;  and  no  person  holding  any  office  under  the 
United  States  shall  be  a  member  of  either  house  during  his 
continuance  in  office. 

SECTION  VII.  1.  All  bills  for  raising  revenue  shall  origin- 
ate in  the  House  of  Representatives;  but  the  Senate  may 
propose  or  concur  with  amendments  as  on  other  bills. 

2.  Every  bill  which  shall  have  passed  the  House  of  Rep- 
resentatives and  the  Senate,  shall,  before  it  become  a  law,  be 
presented  to  the  President  of  the  United  States;  if  he  approve 
he  shall  sign  it,  but  if  not  he  shall  return  it  with  his  objections, 
to  that  house  in  which  it  shall  have  originated,  who  shall  en- 
ter the  objections  at  large  on  their  journal,  and  proceed  to  re- 
consider it.  If  after  such  reconsideration  two-thirds  of  that 
house  shall  agree  to  pass  the  bill,  it  shall  be  sent,  together  with 
the  objections,  to  the  other  house,  by  which  it  shall  likewise,  be 


44:  The  Constitution  of  the  United  States. 

reconsidered  and  if  approved  by  two-thirds  of  that  house,it  shall 
become  a  law.  But  in  all  such  cases  the  votes  of  both  houses 
shall  be  determined  by  yeas  and  nays,  and  the  names  of  the 
persons  voting  for  and  against  the  bill  shall  be  entered  on  the 
journal  of  each  house  respectively.  If  any  bill  shall  not  be 
returned  by  the  President  within  ten  days  (Sundays  excepted) 
after  it  shall  have  been  presented  to  him,  the  same  shall  be  a 
law  in  like  manner  as  if  he  had  signed  it,  unless  the  Congress, 
by  their  adjournment,  prevent  its  return,  in  which  case  it 
shall  not  be  a  law. 

3.  Every  order,  resolution  or  vote  to  which  the  concur- 
rence of  the  Senate  and  the  House  of  Representatives  may  be 
necessary  (except  on  a  question  of  adjournment)  shall  be  pre- 
sented to  the  President  of  the  United  States;  and  before  the 
same  shall  take  effect,  shall  be  approved  by  him,  or,  being  dis- 
approved by  him,  shall  be  repassed  by  two-thirds  of  the  Senate 
and  House  of  Representatives,  according  to  the  rules  and  lim- 
itations prescribed  in  the  case  of  a  bill. 

SECTION  VIII.    The  Congress  shall  have  power — 

1.  To  lay  and  collect  taxes,  duties,  imposts  and  excises, 
to  pay  the  debts  and  provide  for  the  common  defense  and  gen- 
eral welfare  of  the  United  States;  but  all  duties,  imposts  and 
excises  shall  be  uniform  throughout  the  United  States; 

2.  To  borrow  money  on  the  credit  of  the  United  States; 

3.  To  regulate  commerce  with  foreign  nations,  and  among 
the  several  States,  and  with  the  Indian  tribes; 

4.  To  establish  a  uniform  rule  of  naturalization,  and  uni- 
form laws   on  the   subject  of  bankruptcies  throughout  the 
United  States; 

5.  To  coin  money,  regulate  the  value  thereof,  and  of  for- 
eign coin,  and  fix  the  standard  of  weights  and  measures; 

6.  To  provide  for  the  punishment  of  counterfeiting  the 
securities  and  current  coin  of  the  United  States; 

7.  To  establish  post-offices  and  post-roads; 

8.  To  promote  the  progress  of  science  and  useful  arts,  by 
securing  for  limited  times  to  authors  and  inventors  the  exclu- 
sive right  to  their  respective  writings  and  discoveries; 

9.  To  constitute  tribunals  inferior  to  the  Supreme  Court; 

10.  To  define  and  punish  piracies  and  felonies  committed 
on  the  high  seas,  and  offenses  against  the  law  of  nations; 

11.  To  declare  war,  grant  letters  of  marque  and  reprisal, 
and  make  rules  concerning  captures  on  land  and  water; 

12.  To  raise  and  support  armies,  but  no  appropriation  of 
money  to  that  use  shall  be  for  a  longer  term  than  two  years; 

13.  To  provide  and  maintain  a  navy; 

14.  To  make  rules  for  the  government  and  regulation  of 
the  land  and  naval  forces; 


The  Constitution  of  the  United  States.  45 

15.  To  provide  for  calling  forth  the  militia  to  execute  the 
laws  of  the  Union,  suppress  insurrections  and  repel  invasions; 

16.  To  provide  for  organizing,  arming  and  disciplining  the 
militia,  and  for  governing  such  part  of  them  as  may  be  em- 
ployed in  the  service  of  the  United  States,  reserving  to  the 
States,  respectively,  the  appointment  of  the  officers,  and  the 
authority  of  training  the  militia  according  to  the  discipline 
prescribed  by  Congress; 

17.  To  exercise  exclusive  legislation,  in  all  cases  whatso- 
ever, over  such  district  (not  exceeding  ten  miles  square)  as  may, 
by  cession  of  particular  States,  and  the  acceptance  of  Con- 
gress, become  tho  seat  of  the  government  of  the  United  States, 
and  to  exercise  like  authority  over  all  places  purchased  by  the 
consent  of  the  legislature  of  the  State  in  which  the  same  shall 
be,  for  the  erection  of  forts,  magazines,  arsenals,  dock-yards, 
and  other  needful  buildings; 

And  to  make  all  laws  which  shall  be  necessary  and  proper 
for  carrying  into  execution  the  foregoing  powers,  and  all  other 
powers  vested  by  this  Constitution  in  the  Government  of  the 
United  States,  or  in  any  department  or  officer  thereof. 

SECTION  IX.  1.  The  migration  or  importation  of  such  per- 
sons as  any  of  the  States  now  existing  shall  think  proper  to 
admit  shall  not  be  prohibited  by  the  Congress  prior  to  the 
year  one  thousand  eight  hundred  and  eight,  but  a  tax  or  duty 
may  be  imposed  on  such  importation,  not  exceeding  ten  dollars 
for  each  person. 

2.  The  privilege  of  the  writ  of  Habeas  Corpus  shall  not 
be  suspended,  unless  when,  in  cases  of  rebellion  or  invasion, 
the  public  safety  may  require  it. 

3.  No   bill  of   attainder  or   ex  post  facto    law  shall  be 
passed. 

4.  No  capitation  or  other  direct  tax  shall  be  laid,  unless 
in  proportion  to  the  census  or  enumeration  hereinbefore  di- 
rected to  be  taken. 

5.  No  tax  or  duty  shall  be  laid  on  articles  exported  from 
any  State. 

6.  No  preference  shall  be  given  by  any  regulation  of  com- 
merce  or   revenue   to  the   ports  of  one  State  over  those  of 
another;  nor  shall  vessels   bound  to  or  from  one   State   be 
obliged  to  enter,  clear,  or  pay  duties  in  another. 

7.  No  money  shall  be  drawn  from  the  treasury  but  in 
consequence  of  appropriations  made  by  law;  and  a  regular 
statement  and  account  of  the  receipts  and  expenditures  of  all 
public  moneys  shall  be  published  from  time  to  time. 

8.  No  title  of  nobility  shall  be  granted  by  the  United 
States;   and  no  person  holding  any  office  of  profit  or  trust 
under  them  shall,  without  the  consent  of  the  Congress,  accept 


46  The  Constitution  of  the  United  States. 

of  any  present,  emolument,  office  or  title  of  any  kind  what- 
ever, from  any  king,  prince  or  foreign  state. 

Section  X.  1.  ISo  State  shall  enter  into  any  treaty,  alli- 
ance, or  confederation;  grant  letters  of  marque  and  reprisal; 
coin  money;  emit  bills  of  credit;  make  anything  but  gold  and 
silver  coin  a  tender  in  payment  of  debts;  pass  any  bill  of  at- 
tainder, ex  post  facto  law,  or  law  impairing  the  obligation  of 
contracts,  or  grant  any  title  of  nobility. 

2.  No  State  shall,  without  the  consent  of  the  Congress, 
lay  any  impost  or  duties  on  imports  or  exports,  except  what 
may  be  absolutely  necessary  for  executing  its  inspection  laws; 
and  the  net  produce  of  all  duties  and  imposts  laid  by  any 
State  on  imports  or  exports  shall  be  for  the  use  of  the  treas- 
ury of  the  United  States;  and  all  such  laws  shall  be  subject  to 
the  revision  and  control  of  the  Congress.  No  State  shall, 
without  the  consent  of  the  Congress,  lay  any  duty  of  tonnage, 
keep  troops  or  ships  of  war  in  time  of  peace,  enter  into  any 
agreement  or  compact  with  another  State,  or  with  a  foreign 
power,  or  engage  in  war,  unless  actually  invaded,  or  in  such 
imminent  danger  as  will  not  admit  of  delay. 

ARTICLE  II. 

SECTION  I.  1.  The  executive  power  shall  be  vested  in  a 
President  of  the  United  States  of  America.  He  shall  hold  his 
office  during  the  term  of  four  years;  and,  together  with  the 
Vice-President  chosen  for  the  same  term,  be  elected  as  follows: 

2.  Each  State  shall  appoint,  in  such  manner  as  the  legis- 
ture  thereof  may  direct,  a  number  of  electors  equal  to  the 
whole  number  of  senators  and  representatives  to  which  the 
State  may  be  entitled  in  the  Congress;  but  no  senator  or  rep- 
resentative, or  person  holding  an  office  of  trust  or  profit  under 
the  United  States,  shall  be  appointed  an  elector. 

3.  The  electors  shall  meet  in  their  respective  States,  and 
vote  by  ballot  for  two  persons,  of  whom  one  at  least  shall  not 
be  an  inhabitant  of  the  same  State  with  themselves.    And 
they  s!;all  make  a  list  of  all  the  persons  voted  for  and  of  the 
number  of  votes  for  each;  which  list  they  shall  sign  and  cer- 
tify  and  transmit  sealed  to  the  seat  of  government  of  the 
United  States,  directed  to  the  President  of  the  Senate.    The 
President  of  the  Senate  shall,  in  the  presence  of  the  Senate  and 
House  of  Representatives,  open  all  the  certificates,  and  the 
votes  shall  then  be  counted.    The  person  having  the  greatest, 
number  of  votes  shall  be  the  President,  if  such  number  be  a 
majority  of  the  whole  number  of  electors  appointed;  and  if 
there  be  more  than  one  who  have  such  a  majority,  and  have 
an  equal  number  of  votes,  then  the  House  of  Representatives 
shall  immediately  choose,  by  ballot,  one  of  them  for  President 


The  Constitution  of  the  United  States.  47 

and  if  no  person  have  a  majority,  then,  from  the  five  highest 
on  the  list,  the  said  House  shall,  in  like  manner,  choose  the 
President.  But  in  choosing  the  President  the  votes  shall  be 
taken  by  States,  the  representation  from  each  State  having 
one  vote ;  a  quorum  for  this  purpose  shall  consist  of  amember 
or  members  from  two-thirds  of  all  the  States,  and  a  majority 
of  all  the  States  shall  be  necessary  to  a  choice.  In  every  case, 
after  the  choice  of  the  President,  the  person  having  the 
greatest  number  of  votes  of  the  electors  shall  be  the  Vice- 
President.  But  if  there  should  remain  two  or  more  who  have 
equal  votes,  the  Senate  shall  choose  from  them,  by  ballot,  the 
Vice-President. 

4.  The  Congress  may  determine  the  time  of  choosing  the 
electors,  and  the  day  on  which  they  shall  give  their  votes, 
which  day  shall  be  the  same  throughout  the  United  States. 

5.  No  person,  except  a  natural-born  citizen,  or  a  citizen 
of  the  United  States  at  the  time  of  the  adoption  of  this  Con- 
stitution, shall  be  eligible  to  the  office  of  President;  neither 
shall  any  person  be  eligible  to  that  office  who  shall  not  have 
attained  the  age  of  thirty-five  years,  and  been  fourteen  years 
a  resident  within  the  United  States. 

6.  In  case  of  the  removal  of  the  President  from  office,  or 
of  his  death,  resignation,  or  inability  to  discharge  the  powers 
and  duties  of  the  said  office,  the  same  shall  devolve  on  the 
Vice-President;  and  the  Congress  may,  by  law,  provide  for  the 
case  of  removal,  death,  resignation  or  inability,  both  of  the 
President  and  Vice-President,  declaring  what  officer  shall  then 
act  as  President;  and  such  officer  shall  act  accordingly,  until 
the  disability  be  removed,  or  a  President  shall  be  elected. 

7.  The  President  shall,  at  stated  times,  receive  for  his 
services  a  compensation,  which  shall  neither  be  increased  nor 
diminished  during  the  period  for  which  he  shall  have  been 
elected;  and  he  shall  not  receive  within  that  period  any  other 
emolument  from  the  United  States,  or  any  of  them. 

8.  Before  he  enter  on  the  execution  of  his  office,  he  shall 
take  the  following  oath  or  affirmation: 

"I  do  solemnly  swear  (or  affirm)  that  I  will  faithfully  exe- 
cute the  office  of  President  of  the  United  States;  and  will,  to 
the  best  of  my  ability,  preserve,  protect  and  defend  the  Con- 
stitution of  the  United  States." 

SECTION  II.  1.  The  President  shall  be  commander-in- 
chief  of  the  army  and  navy  of  the  United  States,  and  of  the 
militia  of  the  several  States,  when  called  into  the  actual  serv- 
ice of  the  United  States.  He  may  require  the  opinion,  in 
writing,  of  the  principal  officer  in  each  of  the  executive  de- 
partments, upon  any  subject  relating  to  the  duties  of  their 
respective  offices,  and  he  shall  have  power  to  grant  reprieves 


48  The  Constitution  of  the  United  States. 

and  pardons  for  offenses  against  the  United  States,  except  in 
cases  of  impeachment. 

2.  He  shall  have  power,  by  and  with  the  advice  and  con- 
sent of  the  Senate,  to  make  treaties,  provided  two-thirds  of 
the  Senators  present  concur;  and  he  shall  nominate,  and,  by 
and  with  the  advice  and  consent  of  the  Senate,  shall  appoint 
embassadors,  other  public  ministers  and  consuls,  judges  of  the 
Supreme  Court,  and  all  other  officers  of  the  United  States 
whose  appointments  are  not  herein  otherwise  provided  for, 
and  which  shall  be  established  by  law.    But  the  Congress 
may,  by  law,  vest  the  appointment  of  such  inferior  officers  as 
they  think  proper  in  the  President  alone,  in  the  courts  of  law, 
or  in  the  heads  of  departments. 

3.  The  President  shall  have  power  to  fill  all  vacancies 
that  may  happen  during  the  recess  of  the  Senate,  by  granting 
commissions    which    shall  expire  at  the  end  of  their   next 
session. 

SECTION  III.  1.  He  shall,  from  time  to  time,  give  to  the 
Congress  information  of  the  state  of  the  Union,  and  recom- 
mend to  their  consideration  such  measures  as  he  shall  judge 
necessary  and  expedient.  He  may,  on  extraordinary  occa- 
sions, convene  both  houses,  or  either  of  them;  and  in  case  of 
disagreement  between  them,  with  respect  to  the  time  of  ad- 
journment, he  may  adjourn  them  to  such  time  as  he  shall 
think  proper.  He  shall  receive  embassadors  and  other  public 
ministers.  He  shall  take  care  that  the  laws  be  faithfully  exe- 
cuted; and  shall  commission  all  officers  of  the  United  States. 

SECTION  IV.    1.    The   President,  Vice-President  and  all 
civil  officers  of  the  United  States  shall  be  removed  from  office 
on  impeachment  for,  and  conviction  of,  treason,  bribery,  or 
other  high  crimes  and  misdemeanors. 
ARTICLE  III. 

SECTION  I.  1.  The  judicial  power  of  the  United  States 
shall  be  vested  in  one  Supreme  Court  and  in  such  inferior 
courts  as  Congress  may  from  time  to  time  ordain  and  estab- 
lish. The  judges  both  of  the  Supreme  and  inferior  courts 
shall  hold  their  offices  during  good  behavior;  and  shall,  at 
stated  times,  receive  for  their  services  a  compensation  which 
shall  not  be  diminished  during  their  continuance  of  office. 

SECTION  II.  1.  The  judicial  power  shall  extend  to  all 
cases  in  law  and  equity  arising  under  this  Constitution,  the 
laws  of  the  United  States,  and  treaties  made,  or  which  shall 
be  made,  under  their  authority;  to  all  cases  affecting  embas- 
sadors,  other  public  ministers  and  consuls;  to  all  cases  of  ad- 
miralty and  maritime  jurisdiction;  to  controversies  to  which 
the  United  States  shall  be  a  party;  to  controversies  between 
two  or  more  States,  between  a  State  and  citizens  of  another 


The  Constitution  of  the  United  States.  49 

State,  between  citizens  of  different  States,  between  citizens  of 
the  same  State  claiming  lands  under  grants  of  different  States, 
and  between  a  State,  or  the  citizens  thereof,  and  foreign 
states,  citizens,  or  subjects. 

2.  In  all  cases  affecting  embassadors,  other  public  minis- 
ters and  consuls,  and  those  in  which  a  State  shall  be  a  party, 
the  Supreme  Court  shall  have  original  jurisdiction.    In  all  the 
other  cases  mentioned,  the  Supreme  Court  shall  have  appellate 
jurisdiction,  both  as  to  law  and  fact,  with  such  exceptions  and 
under  such  regulations  as  the  Congress  shall  make. 

3.  The  trial  of  all  crimes,  except  in  cases  of  impeach- 
ment, shall  be  by  jury,  and  such  trial  shall  be  held  in  the 
State  where  the  said  crime  shall  have  been  committed;  but 
when  not  committed  within  any  State,  the  trial  shall  be  at 
such  place  or  places  as  the  Congress  may  by  law  have  directed. 

SECTION  III.  1.  Treason  against  the  United  States  shall 
consist  only  in  levying  war  against  them  or  in  adhering  to 
their  enemies,  giving  them  aid  and  comfort.  No  person  shall 
be  convicted  of  treason  unless  on  the  testimony  of  two  wit- 
nesses to  the  same  overt  act,  or  on  confession  in  open  court. 

2.  The  Congress  shall  have  power  to  declare  the  punish- 
ment of  treason ;  but  no  attainder  of  treason  shall  work  cor- 
ruption of  blood,  or  forfeiture,  except  during  the  life  of  the 
person  attainted. 

'ARTICLE  IV. 

SECTION  I.  1.  Full  faith  and  credit  shall  be  given  in»each 
State  to  the  public  acts,  records  and  judicial  proceedings  of 
every  other  State;  and  the  Congress  may,  by  general  laws, 
prescribe  the  manner  in  which  such  acts,  records  and  pro- 
ceedings shall  be  proved,  and  the  effect  thereof. 

SECTION  II.  1.  The  citizens  of  each  State  shall  be  en- 
titled to  all  privileges  and  immunities  of  citizens  in  the  several 
States. 

2.  A  person  charged  in  any  State  with  treason,  felony,  or 
other  crime,  who  shall  flee  from  justice,  and  be  found  in  an- 
other State,  shall,  on  demand  of  the  executive  authority  of  the 
State  from  which  he  fled,  be  delivered  up  to  be  removed  to  the 
State  having  jurisdiction  of  the  crime. 

3.  No  person  held  to  service  or  labor  in  one  State  under 
the  laws  thereof,  escaping  into  another,  shall,  in  consequence 
of  any  laws  or  regulations  therein,  be  discharged  from  such 
service   or  labor;  but  shall  be  delivered  up  on  claim  of  the 
party  to  whom  such  service  or  labor  may  be  due. 

SECTION  III.  1.  New  States  may  be  admitted  by  the 
Congress  into  this  Union;  but  no  new  State  shall  be  formed  or 
erected  within  the  jurisdiction  of  any  other  State,  nor  any 


50  The  Constitution  of  the  United  States. 

State  be  formed  by  the  junction  of  two  or  more  States  or  parts 
of  States,  without  the  consent  of  the  legislatures  of  the 
States'concerned,  as  well  as  of  the  Congress. 

2.  The  Congress  shall  have  power  to  dispose  of,  and  make 
all  needful  rules  and  regulations  respecting  the  territory  or 
other  property  belonging  to  the  United  States;  and  nothing  in 
this  Constitution  shall  be  so  construed  as  to  prejudice  any 
claim  of  the  United  States,  or  of  any  particular  State. 

SECTION  IV.  1.  The  United  States  shall  guarantee  to 
every  State  in  this  Union  a  republican  form  of  government, 
and  shall  protect  each  of  them  against  invasion;  and,  on  ap- 
plication of  the  legislature,  or  of  the  executive  (when  the 
legislature  cannot  be  convened),  against  domestic  violence. 

ARTICLE  V. 

1.  The  Congress,  whenever  two-thirds  of  both  houses 
shall  deem  it  necessary,  shall  propose  amendments  to  this  Con- 
stitution; or,  on  the  application  of  the  legislatures  of  two- 
thirds  of  the  several  States,  shall  call  a  convention  for  pro- 
posing amendments,  which,  in  either  case,  shall  be  valid  to  all 
intents  and  purposes  as  part  of  this  Constitution,  when  rati- 
fied by  the  legislatures  of  three-fourths  of  the  several  States, 
or  by  conventions  in  three-fourths  thereof,  as  the  one  or  the 
other  mode  of  ratification  may  be  proposed  by  the  Congress; 
provided,  that  no  amendment  which  may  be  made  prior  to  the 
year  one  thousand  eight  hundred  and  eight  shall  in  any  man- 
ner affect  the  first  and  fourth  clauses  in  the  ninth  section  of 
the  fifth  article;  and  that  no  State,  without  its  consent,  shall 
be  deprived  of  its  equal  suffrage  in  the  Senate. 

ARTICLE  VI. 

1.  All  debts  contracted  and  engagements  entered  into 
before    the  adoption  of  this  Constitution  shall  be  as  valid 
against  the  United  States'  under  this  Constitution  as  under 
the  Confederation. 

2.  This  Constitution,  and  the  laws  of  the  United  States 
which  shall  be  made  in  pursuance  thereof,  and  all  treaties 
made,  or  which  shall  be  made,  under  the  authority  of  the 
United  States,  shall  be  the  supreme  law  of  the  land;  and  the 
judges  in  every  State  shall  be  bound  thereby,  anything  in  the 
Constitution  or  laws  of  any  State  to  the  contrary  notwith- 
standing. 

3.  The  senators    and    representatives  before  mentioned 
and  the  members  of  the  several  State  legislatures,  and  all  ex- 
ecutive and  judicial  officers,  both  of  the  United  States  and  the 
several  States,  shall  be  bound  by  oath  or  affirmation  to  sup- 


The  Constitution  of  the  United  States.  51 

port  this  Constitution;  but  no  religious  test  shall  ever  be  re- 
quired as  a  qualification  to  any  office  or  public  trust  under  the 
United  States. 

ARTICLE  VII. 

1.  The  ratification  of  the  convention  of  nine  States  shall 
be  sufficient  for  the  establishment  of  this  Constitution  between 
the  States  so  ratifying  the  same. 

Done  in  convention  by  the  unanimous  consent  of 
the  States  present,  the  seventeenth  day  of  Decem- 
ber, in  the  year  of  our  Lord  one  thousand  seven  hun- 
dred and  eighty,  and  of  the  Independence  of  the 
United  States  of  America  the  twelfth.  In  witness 
whereof  we  have  hereunto  subscribed  our  names. 

GEORGE  WASHINGTON, 
President,  and  Deputy  from  Virginia. 

AMENDMENTS. 

ARTICLE  I. 

Congress  shall  make  no  law  respecting  an  establishment 
of  religion,  or  prohibiting  the  free  exercise  thereof;  or  abridg- 
ing the  freedom  of  speech  or  of  the  press;  or  the  right  of  the 
people  peaceably  to  assemble,  and  to  petition  the  government 
for  a  redress  of  grievances. 

ARTICLE  II. 

A  well  regulated  militia  being  necessary  to  the  security  of 
a  free  State,  the  right  of  the  people  to  keep  and  bear  arms 
shall  not  be  infringed. 

ARTICLE  III. 

No  soldier  shall,  in  time  of  peace,  be  quartered  in  any 
house  without  the  consent  of  the  owner,  nor  in  time  of  war, 
but  in  a  manner  to  be  prescribed  by  law. 

ARTICLE  IV. 

The  right  of  the  people  to  be  secure  in  their  persons, 
houses,  papers  and  effects,  against  unreasonable  searches  and 
seizures,  shall  not  be  violated;  and  no  warrants  shall  issue  but 
upon  probable  cause,  supported  by  oath  or  affirmation,  and 
particularly  describing  the  place  to  be  searched,  and  the  per- 
sons or  things  to  be  seized. 

ARTICLE  V. 

Xo  person  shall  be  held  to  answer  for  a  capital  or  other- 


52  The  Constitution  of  the  United  States. 

wise  infamous  crime,  unless  on  a  presentment  or  indictment  of 
a  grand  jury,  except  in  cases  arising  in  the  land  or  naval  forces, 
or  in  the  militia,  when  in  actual  service  in  time  of  war  or  pub- 
lic danger;  nor  shall  any  person  be  subject  for  the  same  offense 
to  be  twice  put  in  jeopardy  of  life  or  limb,  nor  shall  be  com- 
pelled, in  any  criminal  case,  to  be  a  witness  against  himself, 
nor  be  deprived  of  life,  liberty,  or  property,  without  due  pro- 
cess of  law;  nor  shall  private  property  be  taken  for  public  use, 
without  just  compensation. 

ARTICLE  VI. 

In  all  criminal  prosecutions,  the  accused  shall  enjoy  the 
right  to  a  speedy  and  public  trial,  by  an  impartial  jury  of  the 
State  and  district  wherein  the  crime  shall  have  been  com- 
mitted, which  district  shall  have  been  previously  ascertained 
by  law;  and  to  be  informed  of  the  nature  and  cause  of  the  ac- 
cusation; to  be  confronted  with  the  witnesses  against  him;  to 
have  compulsory  process  for  obtaining  witnesses  in  his  favor, 
and  to  have  the  assistance  of  counsel  for  his  defense. 

ARTICLE  VII. 

In  suits  at  common  law,  where  the  value  in  controversy 
shall  exceed  twenty  dollars,  the  right  of  trial  by  jury  shall  be 
preserved;  and  no  fact  tried  by  a  jury  shall  be  otherwise  re- 
examined,  in  any  court  of  the  United  States,  than  according  to 
the  rules  of  the  common  law. 

ARTICLE  VIII. 

Excessive  bail  shall  not  be  required,  nor  excessive  fines 
imposed,  nor  cruel  and  unusual  punishment  inflicted. 

ARTICLE  IX. 

The  enumeration  in  the  Constitution  of  certain  rights 
shall  not  be  construed  to  deny  or  disparage  others  retained  by 
the  people. 

ACTICLE  X. 

The  powers  not  delegated  to  the  United  States  by  the 
Constitution,  nor  prohibited  by  it  to  the  States,  are  reserved 
to  the  States  respectively,  or  to  the  people. 

[The  preceding  ten  amendatory  articles  were  proposed  to  the 
legislatures  of  the  States  by  the  first  Congress.  September  25, 1789. 
and  notification  of  ratification  received  from  all  the  States  except 
Connecticut,  Georgia  and  Massachusetts.] 

ARTICLE  XI. 

The  judicial  power  of  the  United  States  shall  not  be  con- 


The  Constitution  of  the  United  States.  53 

strued  to  extend  to  any  suit  in  law  or  equity  commenced  or 
prosecuted  against  one  of  the  United  States  by  citizens  or  sub- 
jects of  any  foreign  state. 

[Proposed  by  the  Third  Congress,  and  Congress  notified  of  its 
adoption  January  8, 1798.] 

ARTICLE  XII. 

1.  The  electors  shall  meet  in  their  respective  States,  and 
vote  by  ballot  for  President  and  Vice-President,  one  of  whom, 
at  least,  shall  not  be  an  inhabitant  of  the  same  State  with 
themselves.    They  shall  name  in  their  ballots  the  person  voted 
for  as  President,  and  in  distinct  ballots  the  person  voted  for 
as  Vice-President;  and  they  shall  make  distinct  lists  of  all 
persons  voted  for  as  President,  and  of  all  persons  voted  for  as 
Vice-President;  and  of  the  number  of  votes  for  each;  which 
lists  they  shall  sign  and  certify,  and  transmit  sealed  to  the 
seat  of  government  of  the  United  States,  directed  to  the  Presi- 
dent of  the  Senate.    The  President  of  the  Senate  shall,  in  the 
presence  of  the  Senate  and  House  of  Representatives,  open  the 
certificates,  and  the  votes  shall  then  be  counted.    The  person 
having  the  greatest  number  of  votes  for  President  shall  be  the 
President,  if  such  number  be  a  majority  of  the  whole  number 
of  electors  appointed;  and  if  no  person  have  such  majority, 
then  from  the  persons  having  the  highest  numbers,  not  ex- 
ceeding three  on  the  list  of  those  voted  for  as  President,  the 
House  of  Representatives  shall  choose  immediately,  by  ballot, 
the  President.    But,  in  choosing  the  President,  the  votes  shall 
be  taken  by  States,  the  representation  from  each  State  having 
one  vote;  a  quorum  for  this  purpose  shall  consist  of  a  member 
or  members  from  two-thirds  of  the  States,  and  a  majority  of 
all  the  States  shall  be  necessary  to  a  choice.    And  if  the 
House  of  Representatives  shall  not  choose  a  President  when- 
ever the  right  of  choice  shall  devolve  upon  them,  before  the 
fourth  day  of  March  next  following,  then  the  Vice-President 
shall  act  as  President,  as  in  the  case  of  the  death  or  other  con- 
stitutional disability  of  the  President. 

2.  The  person  having  the  greatest  number  of  votes  as 
Vice-President  shall  be  the  Vice-President,  if  such  number  be 
a  majority  of  the  whole  number  of  electors  appointed,  and  if 
no  person  have  a  majority,  then  from  the  two  highest  numbers 
on  the  list  the  Senate  shall  choose  the  Vice-President.    A 
quorum  for  the  purpose  shall  consist  of  two-thirds  of  the  whole, 
number  of  senators,  and  a  majority  of  the  whole  number  shal 
be  necessary  to  a  choice. 

3.  But  no  person  constitutionally  ineligible  to  the  office 
of  President  shall  be  eligible  to  that  of  Vice-President  of  the 
United  States. 


54  The  Constitution  of  the  United  States. 

[Proposed  by  the  Eighth  Congress,  and  declared  adopted  Sep- 
tember 25,  1804,  by  proclamation  of  the  Secretary  of  State.] 

ARTICLE  XIII. 

1.  Neither  slavery  nor  involuntary  servitude,  except  as  a 
punishment  for  crime,  whereof  the  party  shall  have  been  duly 
convicted,  shall  exist  within  the  United  States,  or  any  place 
subject  to  their  jurisdiction. 

2.  Congress  shall  have  power  to  enforce  this  article  by 
appropriate  legislation. 

[Proposed  by  the  Thirty-eighth  Congress,  and  declared  adopted 
December  18, 1865,  by  proclamation  of  the  Secretary  of  Btate.] 

ARTICLE  XIV. 

SECTION  I.  All  persons  born  or  naturalized  in  the  United 
States,  and  subject  to  the  jurisdiction  thereof,  are  citizens  of 
the  United  States  and  of  the  State  wherein  they  reside.  No 
State  shall  make  or  enforce  any  law  which  shall  abridge  the 
privileges  or  immunities  of  citizens  of  the  United  States,  nor 
shall  any  State  deprive  any  person  of  life,  liberty,  or  property, 
without  due  process  of  law,  nor  deny  to  any  person  within  its 
jurisdiction  the  equal  protection  of  the  laws. 

SECTION  II.  Representatives  shall  be  apportioned  among 
the  several  States  according  to  their  respective  numbers, 
counting  the  whole  number  of  persons  in  each  State,  exclud- 
ing Indians  not  taxed.  But  when  the  right  to  vote  at  any 
election  for  the  choice  of  electors  for  President  and  Vice-Presi- 
dent of  the  United  States,  representatives  in  Congress,  the 
executive  and  judicial  officers  of  a  State,  or  the  members  of 
the  legislature  thereof,  is  denied  to  any  of  the  male  inhabit- 
ants of  such  State,  being  twenty-one  years  of  age,  and  citizens 
of  the  United  States,  or  in  any  way  abridged,  except  for  par- 
ticipation in  rebellion  or  other  crime,  the  basis  of  representa- 
tion therein  shall  be  reduced  in  the  proportion  which  the  num- 
ber of  such  male  citizens  shall  bear  to  the  whole  number  of 
male  citizens  twenty-one  years  of  age  in  such  State. 

SECTION  III.  No  person  shall  be  a  senator  or  representa- 
tive in  Congress,  or  elector  of  President  and  Vice-President,  or 
hold  any  office,  civil  or  military,  under  the  United  States,  or 
under  any  State,  who,  having  previously  taken  an  oath  as  a 
member  of  Congress,  or  as  an  officer  of  the  United  States,  or 
as  a  member  of  any  State  legislature,  or  as  an  executive  or 
judicial  officer  of  any  State,  to  support  the  Constitution  of  the 
United  States,  shall  have  engaged  in  insurrection  or  rebellion 
against  the  same,  or  given  aid  or  comfort  to  the  enemies  there  • 
of;  but  Congress  may,  by  a  vote  of  two-thirds  of  each  house, 
remove  such  disability. 


The  Constitution  of  the  United  States.  55 

SECTION  IV.  The  validity  of  the  public  debt  of  the  United 
States,  authorized  by  law,  including  debts  incurred  for  pay- 
ment of  pensions  and  bounties  for  services  in  suppressing  in- 
surrection or  rebellion,  shall  not  be  questioned.  But  neither 
the  United  States  nor  any  State  shall  assume  or  pay  any  debt 
or  obligation  incurred  in  aid  of  insurrection  or  rebellion  against 
the  United  States,  or  any  claim  for  the  loss  or  emancipation  of 
any  slave;  but  all  such  debts,  obligations  and  claims  shall  be 
held  illegal  and  void. 

SECTION  V.  The  Congress  shall  have  power  to  enforce,  by 
appropriate  legislation,  the  provisions  of  this  article. 

[Proposed  by  the  Thirty-ninth  Congress  and  declared  adopted 
by  concurrent  resolution  of  Congress,  July  21, 1868.] 

ARTICLE  XV. 

SECTION  I.  The  right  of  citizens  of  the  United  States  to 
vote  shall  not  be  denied  or  abridged  by  the  United  States,or 
any  State,  on  account  of  race,  color  or  previous  condition  of 
servitude. 

SECTION  II.  The  Congress  shall  have  power  to  enforce 
this  article  by  appropriate  legislation. 

[Proposed  by  the  Fortieth  Congress,  and  declared  adopted  by 
proclamation  of  the  Secretary  of  State,  March  30, 1870.] 


Workingmen  Easily  Gulled. 

Who  fought  for  King  George  in  1776  ?    Working  people. 

What  interest  did  they  have  inbeing  ruled  by  him?    None. 

Why,  then,  did  they  risk  their  lives  for  him?  Because  he 
hired  them. 

Where  did  the  king  get  the  money  to  pay  them?  By  tax- 
ing them. 

Then  they  really  paid  themselves  for  righting?    Certainly. 

In  every  war  ever  fought  the  working  people  paid  the  ex- 
penses. Why  did  they  do  it?  For  the  same  reason  that 
working  people  rote  the  same  ticket  as  the  Pullmans,  Cleve- 
lands,  Carlifles,  Shermans  and  their  fellows— they  don't 
know  any  better.  They  can't  see  the  cat. 

Will  they  ever  learn  better?    Oh,  maybe. 


' '  WHAT  constitutes  a  state  ?    .     .     . 
.     .     .     Men  who  their  duties  know, 
But  know  their  rights,  and,  knowing, 
Dare  maintain."  — Jonet. 


&  "Oppression,  injustice  and  poverty  shall  cease  in  the  land" 

THE  NEW  DECLARATION  OF  INDEPENDENCE. 

•% 

Preamble  and  Platform  of  the  Peoples  Party. 

Unanimously  Adopted  at  the  First  National  Convention  at 
Omaha,  on  the  fourth  day  of  July,  1892. 

ASSEMBLED  upon  the  one  hundred  and  sixteenth  anni- 
*•  *•  versary  of  the  Declaration  of  Independence,  the  People's 
Party  of  America,  in  their  first  national  convention,  invoking 
upon  their  action  the  blessing  of  Almighty  God,  put  forth,  in 
the  name  and  on  behalf  of  the  people  of  this  country,  the  fol- 
lowing preamble  and  declaration  of  principles: 

PREAMBLE. 

The  conditions  which  surround  us  best  justify  our  co-op- 
eration. We  meet  in  the  midst  of  a  nation  brought  to  the 
verge  of  moral,  political  and  material  ruin.  Corruption  dom- 
inates the  ballot-box,  the  legislatures,  the  Congress,  and 
touches  even  the  ermine  of  the  bench.  The  people  are  de- 
moralized; most  of  the  States  have  been  compelled  to  isolate 
the  voters  at  the  polling-places,  to  prevent  universal  intimida- 
tion or  bribery.  The  newspapers  are  largely  subsidized  or 
muzzled;  public  opinion  silenced;  business  prostrated;  our 
homes  covered  with  mortgages;  labor  impoverished,  and  the 
lands  concentrating  in  the  hands  of  the  capitalists.  The 
urban  workmen  are  denied  the  right  of  organization  for  self- 
protection;  imported  pauperized  labor  beats  down  their  wages; 
a  hireling  standing  army,  unrecognized  by  our  laws,  is  estab- 
lished to  shoot  them  down,  and  they  are  rapidly  degenerating 
into  European  conditions.  The  fruits  of  the  toil  of  millions 
are  boldly  stolen  to  build  up  colossal  fortunes  for  a  few,  un- 
precedented in  the  history  of  mankind,  and  the  possessors  of 
these,  in  turn,  despise  the  Republic  and  endanger  liberty. 
From  the  same  prolific  womb  of  governmental  injustice  we 
breed  the  two  great  classes — tramps  and  millionaires. 

The  national  power  to  create  money  is  appropriated  to 
enrich  bondholders.  A  vast  public  debt,  payable  in  legal 
tender  currency,  has  been  funded  into  gold-bearing  bonds, 
thereby  adding  millions  to  the  burdens  of  the  people. 

Silver,  which  has  been  accepted  as  coin  since  the  dawn  of 
history,  has  been  demonetized  to  add  to  the  purchasing  power 
of  gold,  by  decreasing  the  value  of  all  forms  of  property  as 
well  as  human  labor,  and  the  supply  of  currency  is  purposely 

56 


The  New  Declaration  of  Independence.  57 

abridged  to  fatten  usurers,  bankrupt  enterprise,  and  enslave 
industry.  A  vast  conspiracy  against  mankind  has  been  organ- 
ized on  two  continents,  and  is  rapidly  taking  possession  of  the 
world.  If  not  met  and  overthrown  at  once,  it  forebodes  terri- 
ble social  convulsions,  the  destruction  of  civilization,  or  the 
establishment  of  an  absolute  despotism.  We  have  witnessed 
for  more  than  a  quarter  of  a  century  the  struggles  of  the  two 
great  political  parties  for  power  and  plunder,  while  grievous 
wrongs  have  been  inflicted  upon  the  suffering  people.  We 
charge  that  the  controlling  influences  dominating  both  these 
parties  have  permitted  the  existing  dreadful  conditions  to  de- 
velop without  serious  effort  to  prevent  or  restrain  them. 
Neither  do  they  now  promise  us  any  substantial  reform.  They 
have  agreed  together  to  ignore  in  the  coming  campaign  every 
issue  but  one.  They  propose  to  drown  the  outcries  of  a  plun- 
dered people  with  the  uproar  of  a  sham  battle  over  the  tariff, 
so  that  capitalists,  corporations,  national  banks,  rings,  trusts, 
watered  stock,  the  demonetization  of  silver  and  the  oppress- 
ions of  the  usurers  may  all  be  lost  sight  of.  They  propose  to 
sacrifice  our  homes,  lives  and  children  on  the  altar  of  Mam- 
mon; to  destroy  the  multitude  in  order  to  secure  corruption 
funds  from  the  millionaires. 

Assembled  on  the  anniversary  of  the  birthday  of  the  na- 
tion, and  filled  with  the  spirit  of  the  grand  generation  who  es- 
tablished our  independence,  we  seek  to  restore  the  government 
of  the  Republic  to  the  hands  of  "the  plain  people,"  with  whose 
class  it  originated.  We  assert  our  purposes  to  be  identical 
with  the  purposes  of  the  National  Constitution — "to  form  a 
more  perfect  union,  establish  justice,  insure  domestic  tran- 
quillity, provide  for  the  common  defense,  promote  the  general 
welfare  and  secure  the  blessings  of  liberty  for  ourselves  and 
our  posterity." 

We  declare  that  this  Republic  can  only  endure  as  a  free 
government  while  built  upon  the  love  of  the  whole  people  for 
each  other  and  for  the  nation;  that  it  cannot  be  pinned  to- 
gether by  bayonets;  that  the  civil  war  is  over,  and  that  every 
passion  and  resentment  which  grew  out  of  it  must  die  with  it, 
and  that  we  must  be  in  fact,  as  we  are  in  name,  one  united 
brotherhood  of  freemen. 

Our  country  finds  itself  confronted  by  conditions  for 
which  there  is  no  precedent  in  the  history  of  the  world.  Our 
annual  agricultural  productions  amount  to  billions  of  dollars 
in  value,  which  must  within  a  few  weeks  or  months  be  ex- 
changed for  billions  of  dollars  of  commodities  consumed  in 
their  production;  the  existing  currency  supply  is  wholly  in- 
adequate to  make  this  exchange;  the  results  are  falling  prices, 
the  formation  of  combines  and  rings,  the  impoverishment  of 


58  The  New  Declaration  of  Independence. 

the  producing  class.  We  pledge  ourselves  that,  if  given 
power,  we  will  labor  to  correct  these  evils  by  wise  and  reason- 
able legislation  in  accordance  with  the  terms  of  our  platform. 

We  believe  that  the  powers  of  government — in  other 
words,  of  the  people — should  be  expanded  (as  in  the  case  of 
the  postal  service)  as  rapidly  and  as  far  as  the  good  sense  of 
an  intelligent  people  and  the  teachings  of  experience  shall  jus- 
tify, to  the  end  that  oppression,  injustice  and  poverty  shall 
eventually  cease  in  the  land. 

While  our  sympathies  as  a  party  of  reform  are  naturally 
upon  the  side  of  every  proposition  which  will  tend  to  make 
men  intelligent,  virtuous  and  temperate,  we  nevertheless  re- 
gard these  questions,  important  as  they  are,  as  secondary  to 
the  great  issues  now  pressing  for  solution,  and  upon  which 
not  only  our  individual  prosperity  but  the  very  existence  of 
free  institutions  depends;  and  we  ask  all  men  to  first  help  us 
to  determine  whether  we  are  to  have  a  republic  to  administer 
before  we  differ  as  to  the  condition  upon  which  it  is  to  be  ad- 
ministered; believing  that  the  forces  of  reform  this  day  organ- 
ized will  never  cease  to  move  forward  until  every  wrong  is 
remedied,  and  equal  rights  and  equal  privileges  securely  estab- 
lished for  all  the  men  and  women  of  this  country.  We  de- 
clare, therefore: 

DECLARATION  OP  PRINCIPLES. 

First— That  the  union  of  the  labor  forces  of  the  United 
States  this  day  consummated  shall  be  permanent  and  perpet- 
ual. May  its  spirit  enter  into  all  hearts  for  the  salvation  of 
the  Republic  and  the  uplifting  of  mankind. 

Second — Wealth  belongs  to  him  who  creates  it,  and  every 
dollar  taken  from  industry  without  an  equivalent  is  robbery. 
"If  any  will  not  work,  neither  shall  he  eat."  The  interests  of 
rural  and  civic  labor  are  the  same;  their  enemies  are  identical. 

Third — We  believe  that  the  time  has  come  when  the  rail- 
road corporations  will  either  own  the  people  or  the  people 
must  own  the  railroads,  and  should  the  government  enter 
upon  the  work  of  owning  and  managing  any  or  all  railroads, 
we  should  favor  an  amendment  to  the  Constitution  by  which 
all  persons  engaged  in  the  government  service  shall  be  placed 
under  a  civil  service  regulation  of  the  most  rigid  character,  so 
as  to  prevent  the  increase  of  the  power  of  the  national  admin- 
istration by  the  use  of  such  additional  government  employes. 

FINANCE  AND  CURRENCY. 

We  demand  a  national  currency,  safe,  sound  and  flexible, 
issued  by  the  general  government  only,  a  full  legal-tender  for 
all  debts,  public  and  private;  and  that,  without  the  use  of 


The  New  Declaration  of  Independence.  59 

banking  corporations,  a  just,  equitable  and  efficient  means  of 
distribution  direct  to  the  people,  at  a  tax  not  to  exceed  two 
per  cent,  per  annum,  be  provided,  as  set  forth  in  the  sub-treas- 
ury plan  of  the  Farmers'  Alliance, -or  a  better  system;  also  by 
payments  in  discharge  of  its  obligations  for  public  improve- 
ments. 

1.  We  demand  free  and  unlimited  coinage  of  silver  and 
gold  at  the  present  legal  ratio  of  16  to  1. 

2.  We  demand  that  the  amount  of  circulating  medium  be 
speedily  increased  to  not  less  than  850  per  capita. 

3.  We  demand  a  graduated  income  tax. 

4.  We  believe  that  the  money  of  the  country  snould  be 
kept  as  much  as  possible  in  the  hands  of  the  people,  and  hence 
we  demand  that  all  State  and  national  revenues  shall  be  lim- 
ited to  the  necessary  expenses  of  the  government,  economic- 
ally and  honestly  administered. 

5.  We  demand  that  postal  savings  banks  be  established 
by  the  Government  for  the  safe  deposit  of  the  earnings  of  the 
people,  and  to  facilitate  exchange. 

TRANSPORTATION. 

Transportation  being  a  means  of  exchange  and  a  public 
necessity,  the  government  should  own  and  operate  the  rail- 
roads in  the  interest  of  the  people. 

The  telegraph  and  telephone,  like  the  post-office  system, 
being  a  necessity  for  the  transmission  of  news,  should  be 
owned  and  operated  by  the  government  in  the  interest  of  the 
people. 

LAND  OWNERSHIP. 

The  land,  including  all  the  natural  resources  of  wealth,  io 
the  heritage  of  the  people,  and  should  not  be  monopolized  for 
speculative  purposes,  and  alien  ownership  of  land  should  be 
prohibited.  All  land  now  held  by  railroads  and  other  corpor- 
ations in  excess  of  their  actual  needs,  and  all  lands  now  owned 
by  aliens,  should  be  reclaimed  by  the  government  and  held 
for  actual  settlers  only. 

SUPPLEMENTAL,  RESOLUTIONS. 

WHEREAS,  Other  questions  have  been  presented  for  our 
consideration,  we  hereby  submit  the  following,  not  as  a  part  of 
the  platform  of  the  People's  Party,  but  as  resolutions  express 
ive  of  the  sentiment  of  this  convention: 

Resolved,  First,  That  we  demand  a  free  ballot  and  a  fair 
count  in  ail  elections,  and  pledge  ourselves  to  secure  it  to  every 
legal  voter  without  Federal  intervention  through  the  adoption 


60  The  New  Declaration  of  Independence. 

by  the  States  of  the  unperverted  Australian  or  secret  ballot 
system. 

Resolved,  Second,  That  the  revenue  derived  from  a  grad- 
uated income  tax  should  be  applied  to  the  reduction  of  the 
burden  of  taxation  now  levied  upon  the  domestic  industries  of 
this  country. 

Resolved,  Third,  That  we  pledge  our  support  to  fair  and 
liberal  pensions  of  ex-Union  soldiers  and  sailors. 

Resolved,  Fourth,  That  we  condemn  the  fallacy  of  pro- 
tecting American  labor  under  the  present  system,  which  opens 
our  ports  to  the  pauper  and  criminal  classes  of  the  world,  and 
crowds  out  our  wage-earners;  and  we  denounce  the  present  in- 
effective laws  against  contract  labor,  and  demand  the  further 
restriction  of  undesirable  immigration. 

Resolved,  Fifth,  That  we  cordially  sympathize  with  the 
efforts  of  organized  workingmen  to  shorten  the  hours  of  labor, 
and  demand  a  rigid  enforcement  of  the  existing  eight-hour 
law  on  government  work,  and  ask  that  a  penalty  clause  be 
added  to  the  said  law. 

Resolved,  Sixth,  That  we  regard  the  maintenance  of  a 
large  standing  army  of  mercenaries,  known  as  the  Pinkerton 
system,  as  a  menace  to  our  liberties,  and  we  demand  its  aboli- 
tion; and  we  condemn  the  recent  invasion  of  the  Territory  of 
Wyoming  by  the  hired  assassins  of  plutocracy,  assisted  by 
Federal  officers. 

Resolved,  Seventh,  That  we  commend  to  the  thoughtful 
consideration  of  the  people  and  the  reform  press  the  legisla- 
tive system  known  as  the  ab  initio  ad  referendum. 

Resolved,  Eighth,  that  we  favor  a  constitutional  provision 
limiting  the  offices  of  President  and  Vice-President  to  one 
term,  and  providing  for  the  election  of  senators  of  the  United 
States  by  a  direct  vote  of  the  people. 

Resolvec\  Ninth,  That  we  oppose  any  subsidy  or  national 
aid  to  any  private  corporation  for  any  purpose. 


"THE  magnificent  conservative  forces  of  our  Republic  live 
upon  its  farms.  There  is  our  safety  in  the  hour  of  trial. 
Rome  fell  because  her  loafers  and  cityites  were  the  only 
voters.  They  had  no  homes  to  protect  —  they  had  only  votes 
to  sell."  —  John  Me  Govern. 

¥ 

"  BUT  words  are  things,  and  a  small  drop  of  ink, 
Falling,  like  dew,  upon  a  thought,  produces 
That  which  makes  thousands,  perhaps  millions,  think." 

—  Byron. 


y  "  This  Republic  can  endure  only  while  built  upon  the  love 
of  the  whole  people  for  each  other  and  for  the  nation . ' ' 

A  NEW  STUDY  OF  POLITICAL  ECONOMY. 

Based  on  the  Omaha  Platform. 

ECONOMY  is  the  Anglicized  form  of  a  Greek  word  meaning 
household  management.  Political  economy  may  there- 
fore be  defined  as  the  management  of  the  political  household. 
It  is  the  object  of  this  book  to  look  into  the  management  of  the 
political  household  known  as  the  United  States  of  America. 
Every  citizen  shares  in  the  responsibility  of  managing  this 
household,  and  should  therefore  make  it  his  business  to  be  in- 
formed on  every  question  concerning  it.  Rich  or  humble, 
learned  or  otherwise,  it  is  his  duty  to  see  for  himself  and  not 
to  allow  professional  politicians  or  interested  parties  to  do  his 
thinking  for  him.  Citizen  politicians,  as  distinguished  from 
professional  politicians,  should  manage  the  affairs  of  this  na- 
tion. 

The  first  thing  an  American  citizen  should  do  is  to  rid 
himself  of  the  erroneous  idea  that  to  engage  in  politics  is  dis- 
honorable. Politicians  may  be  dishonest,  quite  frequently  are, 
in  fact;  but  that  is  because  the  people  permit  them  to  be.  The 
prevailing  idea  of  politics  to-day  is  that  it  is  "the  art  of  get- 
ting there  if  you  can."  Chambers,  however,  defines  it  as  fol- 
lows: 

"That  branch  of  ethics  which  has  for  its  subject  the 
proper  mode  of  governing  a  state,  so  as  to  secure  its  prosper- 
ity, peace  and  safety,  and  to  attain,  as  perfectly  as  possible,  the 
ends  of  civil  society.  Among  the  subjects  which  political 
science  embraces  are  the  principles  on  which  government  is 
founded,  the  hands  in  which  the  supreme  power  may  be  most 
advantageously  placed,  the  duties  and  obligations  of  the 
governing  and  the  governed  portions  of  society,  the  develop- 
ment and  increase  of  the  resources  of  the  state,  the  protection 
of  the  rights  and  liberties  of  the  citizens,  the  preservation  of 
the  morals  and  the  defense  of  the  independence  of  the  State 
against  foreign  control  or  conquest.  While  the  philosophy  of 
governing  constitutes  the  science  of  politics,  the  art  of  politics 


62  A  New  Study  of  Political  Economy. 

consists  in  the  application  of  that  science  to  the  individual 
circumstances  of  particular  states." 

The  principles  on  which  the  government  of  our  country 
is  founded  are  set  forth  in  the  Declaration  of  Independence 
and  the  Constitution.  The  other  subjects  embraced  in  the 
general  term  political  science  are  now  to  be  considered,  and 
they  will  be  considered  here  with  special  reference  to  the  plat- 
form of  principles  promulgated  by  the  People's  Party. 

The  land  in  which  we  live  is  favored  in  natural  resources 
above  all  others  on  the  planet,  but  in  spite  of  all  the  blessings 
of  Providence,  in  spite  of  the  acknowledged  industry  of  an  in- 
telligent people,  want,  destitution  and  suffering  prevail.  Our 
granaries  are  filled  to  overflowing —and  yet  we  read  of  starva- 
tion. We  read  of  over-production,  and  yet  we  see  every  day 
men,  women  and  children  suffering  from  cold  and  hunger. 
We  have  more  millionaires  than  any  other  nation  of  history — 
and  more  paupers— and  the  number  of  both  is  increasing. 
There  must  be  something  wrong  with  our  political  economy. 

Let  us  see  where  the  trouble  lies. 

First,  let  us  examine  carefully  the  conditions  which  sur 
round  us — then  propose  remedies. 

The  present  chapter  is  intended  as  a  general  summary  of 
the  Omaha  platform— the  People's  Party's  solution  of  the  great 
economic  problems  of  the  day.  A  speech  recently  delivered 
by  Mr.  W.  Scott  Morgan,  of  Arkansas,  does  this  so  logically 
and  so  systematically  that  it  was  deemed  wise  to  print  it  here. 
Further  on  the  more  important  subjects,  and  especially  the 
Initiative  and  Referendum,  will  be  discussed  at  greater 
length. 

LADIES  AND  GENTLEMEN: — I  am  glad  to  meet  so  many  of 
you  here  to-day.  I  a'm  glad  to  know  that  the  time  has  come 
when  party  lines  are  resting  so  loosely  that  people  are  investi- 
gating and  want  to  know  the  truth.  I  am  glad  that  we  have 
arrived  at  that  point  where  mere  promises  and  platforms  will 
not  answer  the  demands  of  the  people;  that  the  people  are 
judging  men  and  parties  by  the  work  they  accomplish;  that 
the  tree  is  judged  by  the  fruit.  By  that  measure  we  are  will- 
ing to  be  measured,  and  by  that  measure  we  propose  to  meas- 
ure others. 

My  friends,  I  hope  we  have  here  as  fellow-citizens.  I  hope 


A  New  Study  of  Political  Economy.  63 

no  man's  fealty  to  his  party  will  prevent  him  from  hearing 
and  knowing  the  truth.  I  believe  that  the  masses  of  the  peo- 
ple are  honest,  and  want  to  know  the  truth  and  do  right.  I 
am  not  here  to  deceive  you,  or  to  defend  a  party  record  that 
has  not  been  in  accord  with  the  interests  of  the  people,  I  be- 
lieve in  the  principles  of  Democracy.  I  believe  in  the  princi- 
ples of  Republicanism.  Those  principles  are  so  nearly  alike 
that  Thomas  Jefferson  belonged  to  both  parties.  The  Demo- 
cratic party  was  once  called  the  Republican  party  to  distin- 
guish it  from  the  Federal  party,  led  by  Hamilton.  I  say  that 
I  am  willing  to  stand  upon  the  principles  of  Democracy,  but  I 
want  to  belong  to  a  party  that  is  trying  to  carry  out  those 
principles. 

If  you  have  voted  the  Democratic  ticket,  you  have  no 
doubt  done  what  you  thought  best.  If  you  have  voted  the 
Republican  ticket,  you  have  done  the  same.  A  Populist  has 
done  no  more.  We  are  all  citizens  of  a  common  country.  Our 
interests  are  the  same.  We  all  love  our  families,  our  homes, 
our  country  and  its  flag.  If  we  are  good  citizens  we  place 
each  of  those  things  above  party,  and  God  above  all. 

And  now,  my  friends,  I  want  to  tell  you  a  little  anecdote, 
and  hope  you  will  all  make  the  right  application  of  it.  A 
friend  of  mine,  Joe  Taggart,  told  Bill  Skinner  he  believed 
there  were  a  hundred  rats  under  his  barn.  Bill  suggested 
that  he  had  better  come  down  a  rat  or  two,  but  Joe  wouldn't 
do  it,  and  finally  they  made  a  bet,  Bill  betting  55  there  weren't 
a  hundred  rats  there.  Joe  got  a  long  pole,  and  said  he  would 
get  under  the  barn  and  stir  the  rats  up,  and  Bill  could  count 
them.  Bill  said  that  was  all  right.  Joe  crawled  under  the 
barn  and  began  to  punch  around,  and  presently  the  whole 
ground  was  covered  with  rats.  Directly  Joe  called  out:  "How 
many  rats  do  you  see,  Bill?"  "Not  a  rat,"  said  Bill.  Then 
Joe  did  some  more  vigorous  punching,  and  again  asked  Bill 
how  many  he  saw.  "Didn't  see  a  rat,"  replied  Bill.  Then  Joe 
raised  a  bigger  racket  than  ever,  and  the  rats  fairly  swarmed 
and  tumbled  over  each  other.  They  were  running  out  from 
under  the  barn,  across  the  lot,  under  the  cribs,  and  two  or 
three  actually  ran  over  Bill,  who  was  lying  down,  apparently 
looking  under  the  barn.  "Do  you  see  any  now?"  said  Joe. 
"Nary  a  rat,"  said  Bill.  Joe  threw  down  his  pole  in  disgust, 
brushed  the  dirt  off  his  clothes,  and  said:  "Bill,  why 
couldn't  you  see  the  rats?  They  were  running  all  over  you." 
"I  had  my  eyes  shut;  I  didn't  want  to  see  'em,"  said  Bill. 
Now,  my  friends,  I  want  to  say  that  there  is  no  bet  up  between 
you  and  me.  I  hope  you  have  not  come  out  here  with  your 
eyes  shut.  If  there  are  any  rats  under  the  political  barn  it  is 
to  your  interest  to  eee  them.  I'm-  going  to  punch  around  the 


64  A  New  Study  of  Political  Economy. 

old  party  barn  today,  and  I  want  you  all  to  keep  your  eyes 
open  and  count  the  rats.  It  may  be  that  some  of  you  will 
come  to  the  conclusion  that  there  are  so  many  rats  and  other 
pests  that  you  will  not  want  to  stay  any  longer  in  that  barn 
for  fear  of  being  destroyed  by  vermin. 

There  is  no  sensible  reason  why  the  American  working- 
men,  and  especially  the  American  farmers,  should  not  be  the 
most  prosperous  and  happy  people  on  earth.  In  intelligence, 
industry  and  natural  productive  resources  we  excel  any  other 
nation  in  the  world.  Our  commercial  ships  touch  the  ports  of 
every  civilized  nation.  Our  165,000  miles  of  railway,  spread- 
ing a  steel  net  over  every  part  of  our  vast  domain,  furnish 
means  of  transportation  not  equaled  by  any  other  country  in 
the  world.  Our  natural  resources  are  unparalleled.  Yet. 
with  all  the  blessings  of  a  kind  providence  on  one  hand,  we 
find  want,  destitution  and  suffering  on  the  other,  and  we  are 
here  to-day  seeking  information  as  to  the  causes  of  this  anom- 
alous condition.  Over-production  cannot  solve  the  problem, 
for  want  and  suffering  cannot  exist  when  there  is  plenty,  and 
that  properly  and  equitably  distributed.  Under-production, 
or  "nothing  to  Bell,"  will  not  solve  it,  for  there  is  little  demand 
for  what  we  have  to  sell ;  besides,  we  have  produced  abun- 
dantly for  years. 

There  are  a  few  men  in  this  country  who  contend  that 
everything  is  lovely,  and  that  we  are  getting  on  swimmingly. 
They  are  mostly  speculators.  They  are  reaping  a  rich  harvest 
from  low  prices  and  the  necessities  of  the  people.  Even 
farmers  who  have  a  little  money  to  speculate  on,  and  are  out 
of  debt,  may  profit  in  the  prevailing  hard  times  by  speculating 
on  the  necessities  of  their  less  fortunate  neighbors  who  are 
compelled  to  have  money  at  any  sacrifice  of  property.  But 
ninety-nine  out  of  every  one  hundred  persons  know  that  labor 
is  not  receiving  its  just  reward;  that  the  producer  is  not  re- 
ceiving an  equitable  share  of  the  things  produced.  Where  is 
the  man  or  woman  who  does  not  feel  the  pressure  of  hard 
times? 

The  Burden  of  Debt. 

In  1850  the  farmers  of  this  country  owned  75  per  cent  of 
its  wealth.  In  1890  they  owned  but  29  per  cent  of  it.  In  1865 
the  people  were  practically  out  of  debt,  except  public  debts. 
In  1890  the  most  conservative  estimates  by  reliable  statisti- 
cians place  the  entire  indebtedness  of  the  people  at  $32,000,- 
000,000 — thirty-two  thousand  million  dollars.  The  census  bul- 
letin gives  startling  figures  with  regard  to  mortgage  indebted- 
ness on  farms  and  homes.  During  the  ten  years  from  1880  to 
1890,  there  were  9,517,747  real  estate  mortgages  placed  on  rec- 


A  New  Study  of  Political  Economy.  65 

ord  in  the  United  States,  The  debt  incurred  on  account  of 
these  mortgages  was  $12,094,877,793.  In  1880  there  were  given 
643,143  mortgages  representing  an  indebtedness  of  $710,888,- 
504.  In  1889  there  were  given  1,226,323  mortgages  represent- 
ing an  indebtedness  of  $1,752,568,274,  or  an  increase  of  90  per 
cent  in  the  number  of  mortgages  and  146  per  cent  in  the 
amount  of  indebtedness.  The  real  estate  mortgage  indebted- 
ness existing  January  1,  1890,  was  over  six  thousand  million 
dollars  represented  by  nearly  five  million  mortgages.  Add  to 
this  the  State,  county,  municipal,  corporate  and  other  private 
indebtedness,  and  it  requires  no  stretch  of  the  imagination  to 
believe  that  it  all  amounts  to  $32,000,000,000.* 

The  interest  on  this  vast  indebtedness  will  average  not  less 
than  6  per  cent.  This  makes  an  interest  charge  on  the  indus- 
tries of  the  people  of  $1,920,000,000  per  annum.  This  does  not 
include  rents,  taxes,  dividends  to  corporations,  tributes  to 
trusts  and  compulsory  donations  to  rich  manufacturers 
through  the  insidious  workings  of  a  so-called  protective  tariff. 
If  we  consider  only  the  revenues  that  go  into  the  public  treas- 
uries, national,  State,  county  and  municipal,  it  would  reach  in 
the  aggregate  no  less  than  $2,700,000,000.  This  is  the  fixed 
annual  tribute  which  the  people  of  this  country  must  pay,  and 
pay  every  dollar  of  it  in  money.  This  is  the  sum  that  we  can 
see  that  we  do  pay  as  distinguished  from  a  larger  sum,  per- 
haps, that  we  can  only  approximate  by  counting  the  number 
of  millionaires  we  create. 

But  what  does  $2,700,000,000  annual  tribute  mean?  Di- 
vided up  among  our  sixty-five  millions  of  people,  it  means  $40 
for  every  man,  woman  and  child  in  the  United  States,  and 
enough  left  undivided  to  build  a  railroad  across  the  continent 
from  New  York  to  San  Francisco.  It  means  $200  to  every 
family  of  five  persons.  To  every  cotton  raiser  it  means  eight 
bales  of  cotton  at  present  prices.  To  every  wheat  raiser  it 
means  500  bushels  of  wheat.  To  the  stock  raiser  it  means 
twenty-five  to  thirty  hogs,  or  fifteen  to  twenty  head  of  cattle. 
To  obtain  the  money  to  pay  it  you  part  with  five  times  as  much 
cotton  and  wheat,  and  three  times  as  much  stock  or  other 
products  as  you  would  twenty-eight  years  ago.  But  you  say 
you  do  not  pay  that  much — you  do  not  raise  that  much  cot- 
ton, wheat  or  stock.  That  may  be  true,  yet  you  pay  more  of 
this  vast  sum  than  you  think.  You  pay  it  in  everything  you 
buy.  You  may  not  owe  a  dollar  in  the  world,  but  your  mer- 
chant or  manufacturer  does,  and  when  they  sell  the  goods  the 
interest  is  charged  up  and  the  consumer  pays  it.  You  may 
not  pay  your  average  proportion  of  that  tribute,  but  you  pay 

*In  a  subsequent  chapter  it  will  be  shown  that  the  interest- 
bearing  debt  of  thia  nation  amounts  to  much  more  than  this  sum. 


66  A  New  Study  of  Political  Economy. 

in  accordance  with  what  you  sell  and  buy,  for  you  are  taxed  on 
bo'.h.  But  this  sum  does  not  represent  all  of  the  burdens  that 
are  borne  by  the  people.  A  system  of  trusts  controls  the  price 
of  every  commodity  that  enters  into  general  consumption,  and 
each  one  lays  tribute  on  the  people  with  the  same  remorseless 
rapacity  as  the  booted  and  spurred  brigands  of  feudal  ages, 
but  with  much  more  safety — for  we  live  in  an  enlightened  and 
civilized  age.  Debt  is  slavery.  It  makes  no  difference 
whether  you  owe  a  man  your  labor  or  the  products  of  your 
labor.  In  either  case  you  are  his  slave.  In  the  case  of  chattel 
slavery  the  master  drives  you  to  work  and  appropriates  the 
proceeds  of  your  labor.  In  the  case  of  debt  slavery  necessity 
compels  you  to  work,  and  your  creditor  takes  the  proceeds  of 
your  labor.  The  chattel  slave  is  entitled  to  and  receives  a 
good  living,  and  his  master  takes  the  balance.  In  the  other 
case  the  creditor  receives  a  good  living  and  the  debtor  slave 
takes  the  balance — if  the  tax  collector  don't  get  it. 

It  is  the  same  old  question  that  has  agitated  the  world 
since  the  world  began — the  rights  of  man  and  the  rights  of 
property.  The  notes,  bonds  and  mortgages  representing  the 
$32,000,000,000  of  indebtedness  are  as  legal  a  title  to  the  pro- 
ceeds of  American  industry  as  were  the  deeds  of  conveyance  of 
African  slaves  to  the  proceeds  of  their  labor  under  the  institu- 
tion of  slavery.  The  same  questions  arise  now  that  were  up 
then.  Shall  these  slaves— these  American  laborers — be  grad- 
ually emancipated  from  debt  slavery— or  shall  debt  slavery  be 
extended  until  other  Sumners,  Garrisons  and  Phillipses,  by 
their  eloquence,  stir  up  the  public  heart  to  the  point  of  tramp- 
ling on  all  legal  safeguards,  enactments  and  decisions,  and 
shoot  it  to  death  as  they  destroyed  chattel  slavery?  We  con- 
cede that  every  man  has  a  right  to  go  into  debt,  but  when  he 
contracts  a  debt  we  insist  that  he  has  a  right  to  pay  that  debt 
with  money  obtained  with  the  same  number  of  day's  labor  that 
it  represented  when  the  debt  was  made.  No  man  has  a  right 
to  demand  a  better  dollar  from  his  debtor  than  the  dollar  he 
loaned  him.  Because  of  the  immense  indebtedness,  and  because 
the  equity  of  that  indebtedness  has  been  fraudulently  changed 
by  increasing  the  purchasing  value  of  the  dollar,  we  consider 
the  money  question  paramount  to  all  others. 

One  of  the  greatest  obstacles  we  have  to  overcome  is  mis- 
representation. People  call  us  cranks  who  never  read  our 
platform.  When  people  take  the  pains  to  investigate  and  un- 
derstand our  principles,  they  avoid  placing  themselves  in  lu- 
dicrous positions  and  saying  many  silly  things. 

Finance,  Transportation  and  Land. 

Finance,  transportation  and  land  are  the  cardinal  princi- 


A  New  Study  of  Political  Economy.  67 

pies  of  our  platform.  On  these  we  are  willing  to  be  measured 
by  the  standard  of  the  Democracy  of  Thomas  Jefferson  or  the 
Republicanism  of  Abraham  Lincoln.  If  we  are  not  in  accord 
with  the  teachings  of  Jefferson  and  Lincoln,  then  we  give  you 
permission  to  say  that  all  our  professions  are  as  "sounding 
brass  or  a  tinkling  cymbal." 

Finance. 

On  the  question  of  finance  our  platform  declares: 

"We  demand  a  national  currency,  safe,  sound  and  flexible, 
issued  by  the  general  government  only;  a  full  legal  tender  for 
all  debts,  public  and  private;  and  that  without  the  use  of  bank- 
ing corporations,  a  just,  equitable  and  efficient  means  of  dis- 
tribution direct  to  the  people,  at  a  tax  not  exceeding  2  per  cent 
per  annum,  be  provided,  as  set  forth  in  the  sub-treasury  plan 
of  the  Farmers'  Alliance,  or  some  better  system;  also  by  pay- 
ments in  discharge  of  its  obligations  for  public  improvements. 

"We  demand  the  free  and  unlimited  coinage  of  silver  and 
gold  at  the  present  legal  ratio  of  sixteen  to  one. 

"We  demand  that  the  amount  of  the  circulating  medium 
be  speedily  increased  to  not  less  than  $50  per  capita." 

This  plank  analyzed  means: 

1.  A  safe,  sound  and  flexible  currency. 

2.  It  shall  be  a  full  legal  tender  for  all  debts. 

3.  It  shall  be  issued  by  the  government,  and  not  by  the 
banks. 

4.  It  may  be  loaned  to  the  people  at  a  tax  of  not  more 
than  2  per  cent. 

5.  It  may  be  paid  out  for  public  improvements. 

6.  Free  coinage  of  silver  at  the  ratio  of  sixteen  to  one. 

7.  Circulating  medium  to  amount  to  $50  per  capita. 

No  one  will  take  issue  with  us  on  the  first  of  these  propo- 
sitions, and  we  see  no  reason  why  they  should  on  the  second. 
Certainly  no  one  in  the  West  or  South  would.  Let  every  dollar 
issued  be  issued  to  pay  our  debts  to  the  rich  as  well  as  to  buy 
the  products  of  the  poor. 

OPPOSED  TO  BANKS  OF  ISSUE. 

3.  "It  shall  be  issued  by  the  government  and  not  by  the 
banks." 

This  is  in  accordance  with  old-time  Democratic  doc- 
trine, but  not  with  modern  Democratic  practice.  Here  is  the 
expression  of  the  Democratic  party  in  1840  on  banks  of  issue: 

Plank  6.  "Resolved,  That  Congress  has  no  power  to  char- 
ter a  United  States  bank;  that  we  believe  such  an  institution 
one  of  deadly  hostility  to  the  best  interests  of  the  country, 


68  A  New  Study  of  Political  Economy. 

dangerous  to  our  republican  institutions  and  the  liberties  of 
the  people,  and  calculated  to  place  the  business  of  the  coun- 
try within  the  control  of  a  concentrated  money  power  and 
above  the  laws  and  will  of  the  people." 

This  plank  was  reaffirmed  in  every  platform  up  to  1860. 
Since  that  time  the  Democratic  party  has  made  no  declara- 
tion of  hostility  to  national  banks  in  any  of  its  national  plat- 
forms. 

In  a  letter  to  Mr.  Gallatin,  in  1803,  Thomas  Jefferson 
said:  "This  institution  is  one  of  the  most  deadly  hostility 
existing  against  the  principles  and  form  of  government."  At 
another  time  he  said:  "Bank  paper  must  be  suppressed  and 
the  circulation  restored  to  the  nation,  to  whom  it  belongs." 
In  volume  7,  page  147,  of  Jefferson's  Works,  he  treats  this  ques- 
tion in  the  following  words: 

"Certainly  no  nation  ever  before  abandoned  to  the  avarice 
and  juggling  of  private  individuals  to  regulate,  according  to 
their  own  interests,  the  quantum  of  circulating  medium  for 
the  nation.  To  inflate  by  deluges  of  paper  the  nominal  prices 
of  property,  and  then  to  buy  that  property  at  one  shilling  on 
the  pound,  first  having  withdrawn  their  floating  medium, 
which  might  endanger  a  competition  in  the  purchase.  Yet 
this  is  what  has  been  done,  and  will  continue  to  be  done  un- 
less stayed  by  the  protecting  hand  of  our  legislatures.  The 
evil  has  been  produced  by  the  error  of  their  sanction  of  this 
ruinous  machinery  of  banks,  and  justice,  wisdom,  duty,  all  re- 
quire that  they  interpose  and  arrest  it  before  the  schemes  of 
plunder  and  spoliation  desolate  our  country.  If  we  suffer  the 
moral  of  the  present  lesson  to  pass  away  without  improvement 
by  the  eternal  suppression  of  bank  paper,  then,  indeed,  is  the 
condition  of  our  country  desperate.  Interdict  forever  to  both 
State  and  national  government  the  power  of  establishing  any 
paper  bank,  for  without  this  interdiction  we  shall  have  the 
same  ebbs  and  flows  of  medium,  and  the  same  revolutions  of 
property,  to  go  through  every  twenty  or  thirty  years." 

In  these  words  Mr.  Jefferson  very  distinctly  points  out  the 
cause  of  the  periodical  panics  and  business  depressions  we 
have  had  in  this  country  every  twenty  or  thirty  years.  If  he 
lived  in  this  age  he  would  be  called  a  crank  and  calamity 
howler.  This  is  exactly  the  position  Populists  take.  We  claim 
with  Mr.  Jefferson  that  as  long  as  the  banks  issue  the  money, 
and  thus  control  its  volume,  we  will  have  panics  and  periods 
of  business  depression. 

In  a  letter  to  Mr.  Epps,  dated  November  6, 1813,  Mr.  Jef- 
ferson said: 

"At  the  time  we  were  funding  our  national  debt  we  heard 
much  about  a  'public  debt  being  a  public  blessing;'  that  the 


A  New  Study  of  Political  Economy.  69 

stock  representing  it  was  a  creation  of  active  capital  for  the 
ailment  of  commerce,  manufactures  and  agriculture. 

"But  the  art  and  mystery  of  banks  is  a  wonderful  im- 
provement on  that.  It  is  established  on  the  principle  that 
private  debts  are  a  public  blessing. 

"And  to  fill  up  the  measure  of  blessing,  instead  of  paying 
they  receive  interest  on  what  they  owe  from  those  to  whom 
they  owe;  for  all  the  notes,  or  evidence  of  what  they  owe, 
which  we  see  in  circulation,  have  been  lent  to  somebody  on  an 
interest  which  is  levied  again  on  us  through  the  medium  of 
commerce.  And  they  are  so  ready  still  to  deal  out  their  lia- 
bilities to  us,  that  they  are  now  willing  to  let  themselves  run 
in  our  debt  ninety  millions  more,  on  our  paying  them  the  same 
premium  of  6  or  8  per  cent,  interest,  and  on  the  same  legal  ex- 
emption from  the  payment  of  more  than  thirty  millions  of  the 
debt  when  it  shall  be  called  for. 

"If  the  debt  which  the  banking  companies  owe  be  a  bless- 
ing to  anybody,  it  is  to  themselves  alone,  who  are  realizing  a 
solid  interest  of  8  or  10  per  cent  on  it.  As  to  the  public,  the 
companies  have  banished  all  our  gold  and  silver  medium, 
which  before  their  institution  we  had  without  interest,  instead 
of  which  they  have  given  us  two  hundred  millions  of  froth  and 
bubble  on  which  we  are  to  pay  them  heavy  interest. 

"It  is  said  that  pur  paper  is  as  good  as  silver,  because  we 
may  have  silver  for  it  at  the  bank  where  it  issues.  This  is  not 
true.  One,  two  or  three  persons  might  have  it,  but  a  general 
application  would  soon  exhaust  their  vaults  and  leave  a  ruin- 
ous proportion  of  their  paper  in  its  intrinsic  worthless  form. 

"When  I  speak  comparatively  of  the  paper  emission  of  the 
old  Congress  and  the  present  banks,  let  it  not  be  imagined 
that  I  cover  them  under  the  same  mantle." 

Other  American  statesmen  whose  memory  we  cherish 
have  left  us  a  record  of  their  expressions  of  hostility  to  banks 
of  issue. 

Thomas  H.  Benton  said: 

"The  government  ought  not  to  delegate  this  power  if  it 
could.  It  is  too  great  a  power  to  be  trusted  to  any  banking 
company  whatever,  or  to  any  but  the  highest  and  most  re- 
sponsible government." 

Ciay  said: 

"I  conceive  the  establishment  of  this  United  States  bank 
as  dangerous  to  the  safety  and  welfare  of  the  republic." 

John  Randolph  said: 

"Charter  a  bank  with  $35,000,000,  let  it  establish  and  learn 
its  power,  and  then  find,  if  you  can,  means  to  bell  the  cat." 

John  C.  Calhoun  said: 


70  A  New  Study  of  Political  Economy. 

"The  bank  is  a  union  of  the  government  and  money 
power — a  union  far  more  dangerous  than  church  and  state." 

James  A.  Garfield  said: 

"Whoever  controls  the  volume  of  money  in  any  country  is 
absolute  master  of  all  industry  and  commerce." 

Our  opponents  lose  no  opportunity  to  ridicule  our  posi- 
tion in  opposition  to  banks  of  issue,  and  in  favor  of  govern- 
ment issue  of  money.  But  we  may  console  ourselves  that 
Thomas  Jefferson  was  also  ridiculed  for  the  same  thing.  In  a 
letter  to  President  Adams,  January  24, 1814,  he  wrote: 

"I  have  ever  opposed  money  of  banks;  not  of  those  dis- 
counting for  cash,  but  of  those  fostering  their  own  paper  in 
circulation,  and  thus  banishing  our  cash.  My  zeal  against 
those  institutions  was  so  warm  and  open  at  the  establishment 
of  the  Bank  of  the  United  States  that  I  was  derided  as  a  ma- 
niac by  the  tribe  of  bank  mongers  who  were  seeking  to  filch 
from  the  public." 

If  anything  further  were  needed  to  show  that  our  position 
on  this  question  is  in  accordance  with  time-honored  Demo- 
cratic principles,  the  following  extract  taken  from  President 
Jackson's  veto  message  to  Congress,  December  2, 1834,  will  be 
sufficient: 

"Circumstances  make  it  my  duty  to  call  the  attention  of 
Congress  to  the  Bank  of  the  United  States.  Created  for  the 
convenience  of  the  government,  that  institution  has  become 
the  scourge  of  the  people.  Its  interference  to  postpone  the 
payment  of  a  portion  of  the  national  debt  that  it  might  retain 
the  public  money  appropriated  for  that  purpose  to  strengthen 
it  in  a  political  contest,  the  extraordinary  extension  and  con- 
traction of  its  accommodations  to  the  community,  its  corrupt 
and  partisan  loans,  its  exclusion  of  the  public  directors  from 
a  knowledge  of  its  most  important  proceedings,  the  unlimited 
authority  conferred  on  the  President  to  expend  its  fund  in 
hiring  writers  and  procuring  the  execution  of  printing  and 
the  use  made  of  that  authority,  the  retention  of  the  pension 
money  and  books  after  the  selection  of  new  agents,  have 
through  various  channels  been  laid  before  Congress.  They 
were  substantially  a  confession  that  all  the  real  distresses 
which  individuals  and  the  country  had  endured  for  the  pre- 
ceding six  or  eight  months  have  been  needlessly  produced  by 
it  with  the  view  of  affecting,  through  the  sufferings  of  the  peo- 
ple, the  legislative  action  of  Congress." 

GOVERNMENT  LOANS. 

One  of  the  great  bugaboos  in  our  platform  is  the  declaia- 
tion  in  favor  of  government  loans.  We  are  told  that  it  is  not 
only  impractical,  but  unconstitutional.  It  has  become  quite 


A  New  Study  of  Political  Economy.  71 

popular  now  to  pronounce  everything  unconstitutional  that 
has  for  its  object  relief  for  the  masses.  The  government  may 
loan  to  five  individuals  who  will  incorporate  themselves  into 
a  company  under  the  name  of  a  national  bank,  but  it  is  a  vio- 
lation of  the  Constitution  to  loan  to  a  farmer,  who  owns  the 
basis  of  all  securities  -  land.  The  government  has  loaned  mill- 
ions of  dollars  to  exposition  and  railroad  companies  with  prac- 
tically no  security,  and  no  one  has  been  swift  to  denounce  it  as 
unconstitutional.  Government  has  loaned  money  to  banks, 
with  and  without  interest.  The  government  has  loaned  money 
to  the  States,  and  States  have  loaned  money  to  individuals,  on 
real  estate  security.  The  States  of  Missouri  and  Oregon  loan 
their  school  money  to  farmers  on  real  estate  security.  For 
years  Eastern  loan  companies  have  proved  the  practicability 
and  safety  of  real  estate  loans  by  plastering  the  country  over 
with  mortgages.  Certainly  the  farmer  can  better  pay  2  per 
cent  than  8  to  10  per  cent.  The  amount  saved  in  the  dif- 
ference of  interest  would  pay  the  principal  in  fifteen  years. 
No  man  has  ever  been  able  to  point  out  where  or  why  it  is  un- 
constitutional. It  is  not  a  new  idea.  The  Massachusetts  col- 
ony issued  money,  and  leaned  to  her  people  for  a  specified 
term  of  years  money  to  the  amount  of  £115,000.  After  a  trial 
of  this  plan  for  four  years  every  industry  seemed  to  flourish 
and  thrive  as  never  before.  The  colony  then,  in  1720,  just  four 
years  later,  issued  another  loan,  making  in  all  money  issued 
and  loaned  to  the  people  on  real  estate  securities  £222.000  or 
$1,110,000.  The  same  authority  shows  that  other  colonies  fol- 
lowed this  same  mode. 

Russia  makes  land  loans  to  her  peasant  farmers.  The 
Dominion  of  Canada  recently  made  an  experiment  in  that  di- 
rection with  marked  success.  They  made  a  long-time  loan  to 
members  of  the  Mennonite  colony  at  a  low  rate  of  interest,  and 
every  dollar  of  it  was  paid.  Why  should  it  be  thought  a  thing 
incredible  and  impractical  to  loan  money  on  land  when  land  is 
considered  the  basis  of  all  security?  Let  the  nine  millions  of 
mortgages  that  were  placed  on  land  from  1880  to  1890  at  an 
average  rate  of  6  3-5  per  cent,  answer  the  question. 

Although  Coxey's  plan  to  issue  money  to  build  good  roads, 
and  thereby  not  only  increase  the  volume  of  currency,  but 
give  employment  to  the  idle,  was  ridiculed  and  scorned  by 
Congress,  and  Coxey  himself  put  in  jail  ostensibly  for  carry- 
ing a  banner  a  size  larger  than  a  Columbian  postage  stamp, 
and  fined  for  walking  on  the  grass,  it  is  not  generally  known 
that  the  road  he  traveled  from  Massillon,  Ohio,  to  Washington, 
was  built  by  the  national  government  and  paid  for  out  of  na- 
tional funds.  The  great  national  pike  is  an  enduring  monu- 
ment of  the  idea  which  inspired  Coxey  and  is  in  accord  with 


72  A  New  Study  of  Political  Economy. 

that  part  of  our  platform.  The  improvement  of  the  water- 
ways is  also  exactly  in  line  with  this  principle.  There  is  noth- 
ing impractical,  nothing  unconstitutional,  or  nothing  new  and 
strange  in  this  declaration. 

FREE  COINAGE. 

The  People's  Party  are  in  favor  of  free  coinage  of  silver  at 
the  ratio  of  16  to  1  without  waiting  for  the  consent  of  any 
other  nation  on  earth.  We  favor  this  proposition  because  it 
will  increase  the  volume  of  currency  in  circulation  and  con- 
tribute not  only  to  make  better  prices  for  the  products  of  la- 
bor, but  to  break  the  power  which  the  bankers  now  have  to 
control  the  currency.  The  People's  Party  is  the  only  national 
party  that  favors  free  and  unlimited  coinage  of  silver.  It  is 
the  only  party  that  put  an  absolute  free  silver  plank  in  its  na- 
tional platform.  It  is  the  only  party  that  ran  a  free  silver 
candidate  for  President.  It  is  the  only  party  whose  members 
of  Congress  cast  a  solid  and  united  vote  for  free  silver  when 
the  question  came  up  in  Congress.  It  is  the  only  party  that 
will  ever  give  this  country  free  silver. 

FIFTY  DOLLARS  PER  CAPITA. 

The  People's  Party  has  been  charged  with  wanting  to  flood 
the  country  with  money.  Our  platform  demands  an  increase 
of  the  volume  of  currency  to  $50  per  capita.  It  is  now,  accord- 
ing to  the  report  of  the  Secretary  of  the  Treasury,  about  $24 
per  capita — most  of  which  is  not  in  active  circulation.  France 
has  over  $40  per  capita  in  circulation,  and  this  country  di- 
rectly after  the  late  war,  the  most  prosperous  period  in  its  his- 
tory, had  $50  per  capita.  The  wildest  "dreamer"  or  "infla- 
tionist," as  we  are  sometimes  called,  has  not  asked  for  more 
than  that.  With  our  undeveloped  resources  and  our  immense 
territory  we  think  it  not  too  much. 

THE  INCOME  TAX. 

We  demand  a  graduated  income  tax.  We  believe  that 
those  whose  incomes  reach  up  into  the  thousands  should  be 
taxed  on  that  income  to  help  bear  the  burdens  of  government. 
We  believe  that  that  tax  should  be  made  heavier  as  that  in- 
come increases,  so  that  if  a  man's  income  was  $1,000,000  the 
government  would  get  such  a  large  slice  of  it  in  the  way  of  an 
income  tax  that  he  would  wish  he  was  something  else  besides 
a  millionaire.  We  are  charged  here  with  wanting  to  limit  the 
amount  a  man  shall  make.  We  don't  want  to  do  any  such 
thing,  but  we  do  want  to  limit  the  amount  he  steals.  In  1863 


A  New  Study  of  Political  Economy.  73 

there  was  a  law  passed  creating  a  tax  on  incomes.  It  expired 
by  limitation  in  1871.  During  that  time  there  were  collected 
under  that  law  the  following  amounts: 

From  personal  incomes $264.190,863 

From  corporations 68,250,504 

From  salaries  of  United  States  officers  and  em- 
ployes       13,889,604 

Total  amount  collected $347,220,897 

The  Senate  sugar  tariff  bill  contains  an  income  tax  in  a 
modified  form — very  much  modified. 

ECONOMY. 

The  People's  Party  believes  in  economy.  Our  platform 
declares: 

"We  believe  that  the  money  of  the  country  should  be  kept 
as  much  as  possible  in  the  hands  of  the  people,  and  hence  we 
demand  that  all  State  and  national  revenues  shall  be  limited 
to  the  necessary  expenses  of  the  government,  economically  and 
honestly  administered." 

The  only  objection  we  have  ever  known  to  that  plank  is 
in  the  practices  of  the  leaders  of  the  two  old  parties. 

POSTAL  SAVINGS  BANKS. 

"We  demand  that  postal  savings  banks  be  established  by 
the  government  for  the  safe  deposit  of  the  earnings  of  the  peo- 
ple and  to  facilitate  exchange." 

This  has  been  recommended  by  various  postmasters-gen- 
eral. The  Dominion  of  Canada,  in  1867,  passed  an  act  creating 
post-office  banks,  but  it  was  limited  to  the  provinces  of  Ontario 
and  Quebec,  and  on"  September  1,  1885,  was  extended  to  the 
provinces  of  Nova  Scotia  and  New  Brunswick.  There  were 
494  offices  in  1890.  On  June  30,  1890,  these  banks  reported 
112.321  depositors,  with  total  deposits  amounting  to  $21,900,- 
653,  an  increase  of  nearly  819,000,000  in  ten  years.  There  were 
also  government  banks  established  in  the  Maritime  Provinces 
and  in  Manitoba  and  British  Columbia,  with  forty-one 
branches,  but  are  being  merged  into  post-office  savings  banks. 
Rate  of  interest  paid  is  3%  per  cent. 

The  bank  failures  of  1893  have  made  many  advocates  of 
postal  savings  banks.  Such  banks  would  make  panics  impos- 
sible. 

The  Transportation  Problem. 

The  People's  Party  is  in  favor  of  government  ownership  of 


7i  A  New  Study  of  Political  Economy. 

railways.    On  this  question  our  platform  declares  as  follows: 

"We  believe  that  the  time  has  come  when  the  rahroad 
corporations  will  either  own  the  people  or  the  people  must  own 
the  railroads;  and  should  the  government  enter  upon  tne  work 
of  owning  and  managing  any  or  all  railroads,  we  should  favor 
an  amendment  to  the  Constitution  by  which  all  persons  en- 
gaged in  the  government  service  shall  be  placed  under  a  civil 
service  regulation  of  the  most  rigid  character,  so  as  to  prevent 
the  increase  of  the  power  of  the  national  administration  by  the 
use  of  such  additional  government  employes. 

"Transportation  being  a  means  of  exchange,  and  a  public 
necessity,  the  government  should  own  and  operate  ine  rail- 
roads in  the  interest  of  the  people." 

We  are  aware  that  in  the  treatment  of  this  subject  we  are 
treading  on  grounds  that  are  hotly  contested.  We  have  no 
hesitation  in  approaching  it.  Many  people  are  foolish  enough 
to  believe  that  government  ownership  is  a  new  fantastical  idea 
that  originated  within  the  chimerical  brain  of  some  crazy 
Populist.  The  idea  of  government  ownership  is  as  old  as  the 
invention  of  railroads.  Among  the  governments  now  owning 
and  operating  their  own  lines,  together  with  the  number  of 
miles  they  are  operating,  are  the  following:  Germany,  23,843; 
Austria-Hungary,  7,800;  Belgium,  3,000;  Italy,  8,110;  Portugal, 
600;  Denmark,  963;  Norway,  700;  Roumania,  1,900;  Russia, 
6,824;  British  India,  8,423;  Japan,  710;  Egypt,  1,200;  the  Cape 
Colony,  1,974;  Port  Natal,  399;  New  South  Wales,  2,182;  Vic- 
toria, 2,688;  Tasmania,  1,900;  New  Zealand,  1,824;  South  Aus- 
tralia, 1,752;  Queensland,  2,058;  West  Australia,  496;  Chile, 682; 
Argentine,  1,817;  Brazil,  1,568. 

These  figures  are  taken  from  statistical  reports  ranging 
from  the  year  1888  to  1892.  In  addition  to  these  the  Dominion 
of  Canada  owns  and  operates  four  railways,  the  cost  of  which 
up  to  June  30, 1890,  was  §52,800,000.  Besides  this,  the  govern- 
ment exercises  the  strictest  central  over  the  roads  owned  by 
corporations. 

In  South  America  most  of  the  governments  own  and  oper- 
ate a  portion  or  all  of  their  railroads.  The  Republic  of  Ecua- 
dor, in  1889,  owned  and  operated  most  of  her  railroads.  The 
total  number  of  miles  opera  ted  in  Chile,  in  1887,  was  1,674,  of 
which  682  were  owned  by  the  state.  The  Argentine  Republic, 
in  1887,  owned  and  operated  1,148  miles  of  railroad;  Buenos 
Ayres,  572,  and  the  Province  of  Santa  Fe,  102  miles.  Brazil 
owns  and  operates  1,200  miles  of  railroad,  which  yields  a  net 
income  of  3  per  cent  on  the  capital  invested.  Germany,  per- 
haps, owns  and  operates  more  miles  of  railroad  than  any  other 
nation.  The  total  number  of  miles  in  operation  in  that  coun- 
try, in  1891,  was  43,000  kilometres,  or  nearly  27,000  miles.  Of 


A  New  Study  of  Political  Economy.  75 

these  roads  the  government  owned  and  operated  38,250  kilo- 
metres, or  more  than  23,000  miles.  The  Annual  of  1889  con- 
tains the  statement  that  the  roads  had  turned  into  the  public 
treasury  1,006,262,000  marks,  or  about  $250,000,000,  with  which 
about  4,000  miles  of  new  road  had  been  constructed,  with  quite 
a  good  sum  left  unexpended. 

Ex-Governor  William  Larrabee  in  his  excellent  work, 
"The  Railroad  Question,"  which  is  recognized  as  a  standard 
book  on  the  subject,  and  from  which  we  have  quoted  largely, 
says: 

"No  one  can  contradict  the  following  facts,  viz.:  That  the 
average  cost  of  European  roads  is  much  greater  than  that  of 
American  roads;  that  the  number  of  railroad  employes  per 
mile  is  much  greater  than  here;  that  much  larger  sums  are 
expended  for  repairing  and  improving  the  roads,  and-  that, 
therefore,  the  lives  of  passengers  are  much  safer  in  Europe 
than  in  America,  and  that  the  average  speed  and  eorrespoud- 
ing  accommodations  of  European  trains,  and  especially  those 
of  England,  France  and  Austria-Hungary,  compare  quite  fav- 
orably with  the  average  speed  and  corresponding  accommo- 
dations of  our  roads.  It  is,  under  these  circumstances,  absurd 
to  claim  that  the  higher  prices  charged  by  American  roads 
are  due  to  the  greater  cost  of  service." 

Governor  Larrabee  quotes  from  Arthur  T.  Hadley,  "Rail- 
road Transportation,  Its  History  and  Its  LawV  this  state- 
ment: 

"The  importance  of  the  zone  system  in  Austria  and  in 
Hungary  lies  in  the  fact  that  its  adoption  was  accompanied  by 
a  great  reduction  in  rates.  The  unit  rate  for  slow  third-class 
trains,  which  had  previously  been  nearly  1^  cents  per  mile, 
was  reduced  to  less  than  1  cent." 

Speaking  of  the  effect  of  this  reduction  of  rates,  Mr.  Lar- 
rabee says: 

"The  zone  system  recently  adopted  in  Hungary  reduced 
both  the  passenger  and  freight  rates  of  the  government  roads 
at  least  one-third,  and  this  reduction  has,  contrary  to  expecta- 
tions, greatly  increased  their  net  revenues." 

In  summarizing  the  results  of  government  ownership  in 
European  countries,  Mr.  Larrabee  says: 

"For  the  past  fifteen  years  there  has  been  a  decided 
drift  on  the  European  continent  toward  state  ownership  of 
railroads." 

The  principle  upon  which  the  demand  for  government 
ownership  rests,  is  that  railroads  are  public  highways,  neces- 
sary to  the  public  welfare  and  convenience,  the  same  as  our 
public  roads  and  waterways,  and  as  forming  too  important  a 


76  A  New  Study  of  Political  Economy. 

factor  in  the  commerce  and  exchange  of  the  country  to  be  left 
to  the  whims  and  caprices  of  individuals. 

TELEGRAPH  AND  TELEPHONE  LINKS. 

On  the  subject  of  telegraphs  and  telephones  our  platform 
contains  the  following  declaration: 

"The  telegraph  and  the  telephone,  like  the  post-office  sys- 
tem, being  a  necessity  for  the  transmission  of  news,  should  be 
owned  and  operated  by  the  government  in  the  interest  of  the 
people." 

One  of  the  greatest  monopolies  in  the  land  is  the  Western 
Union  Telegraph  Company.  Its  exactions  on  the  people  are 
without  a  parallel.  It  controls  not  only  the  quantity  of  news 
furnished  our  great  metropolitan  papers,  but  the  quality. 
Starting  in  1858  with  a  capital  of  $358,700,  it  declared  "stock 
dividends"  in  eight  years  of  $17,810,146.  It  then  added  nearly 
t  womillion  dollars  for  new  lines,  making  its  capital  $20,000,- 
000.  The  next  year  it  added  $20,000,000  of  watered  stock, 
which  increased  its  capital  to  $40,000,000.  At  present  it  is 
$100,000,000.  Its  annual  average  profits  for  the  period  of 
thirty-four  years  have  been  300  per  cent.,  its  largest  dividend 
reaching  414  per  cent.  Every  $1,000  invested  in  1858  has  paid 
$58,000  in  stock  dividends  and  $100,000  cash.  If  the  govern- 
ment would  buy  it  the  net  profits  would  create  a  sinking  fund 
that  would  pay  for  the  entire  system  in  ten  years,  after  which 
prices  could  be  reduced  to  less  than  one-third  of  the  present 
rates.  England  and  France  own  their  telegraph  lines,  and 
while  the  rates  are  less  than  hah*  what  they  are  in  this  coun- 
try, the  lines  pay  a  net  revenue,  above  all  expenses,  into  the 
public  treasury.  A  recent  number  of  the  Arena  contains  an 
excellent  article  by  Justice  Clark,  of  the  Supreme  Court  of 
North  Carolina,  showing  from  a  judicial  standpoint  that  Con- 
gress would  not  only  be  justified,  but  that  it  is  under  legal  and 
moral  obligation  under  the  Constitution  to  give  the  people  the 
best  and  speediest  postal  facilities  such  as  the  telegraph  af- 
fords. 

Land. 

Land  is  the  source  of  all  human  subsistence.  The  earth 
provides  for  every  human  want.  On  this  question  our  plat- 
form makes  the  following  declaration: 

"The  land,  including  all  the  natural  sources  of  wealth,  is 
the  heritage  of  all  the  people,  and  should  not  be  monopolized 
for  speculative  purposes,  atn^hsrien  ownership  of  land  should 
be  prohibited.  All  lands  now  held  by  railroads  and  other  cor- 
porations, in  excess  of  their  actual  needs,  and  all  lands  now 


A  New  Study  of  Political  Economy.  77 

owned  by  aliens,  should  be  reclaimed  by  the  government  and 
held  for  actual  settlers  only." 

As  the  land  is  the  source  from  which  all  human  necessi- 
ties are  supplied,  we  believe  that  no  man  has  a  right  to  more 
than  he  needs  for  his  own  use  while  others  are  homeless  and 
suffering  for  that  which  it  can  be  made  to  produce.  Property 
rights  must  always  give  way  to  human  rights.  Private  rights 
must  be  subordinate  to  the  public  welfare.  Predicated  on  the 
grand  principle  of  greatest  good  to  the  greatest  number,  we 
have  made  this  declaration  on  land. 

Our  Condition. 

Having  thus  briefly  discussed  the  principles  embodied  in 
our  platform,  it  now  devolves  upon  us  to  point  out  a  remedy 
for  existing  evils.  Before  doing  this,  however,  it  becomes  nec- 
essary for  us  to  understand  our  condition  and  the  causes 
which  have  led  to  it.  To  this  end  I  could  do  no  better  than  to 
first  call  your  attention  to  the  preamble  of  our  platform 
adopted  at  Omaha,  July  4,  1892.  Let  every  man  read  that 
document.  It  foretells  with  unerring  truth  the  disasters 
which  have  recently  overwhelmed  us.  In  the  light  of  these 
events  it  reads  like  a  prophecy.  Millions  of  men  and  women 
are  out  of  employment,  and  soon  the  cold  blasts  of  winter  will 
witness  such  suffering  and  privation  as  was  never  before  known 
in  this  country.  Silver  has  been  demonetized  and  the  banks 
clothed  with  a  power  over  our  currency  and  over  the  business 
of  the  country  that  endangers  our  liberties  and  our  prosperity. 
In  twenty-one  years,  from  1871  to  1892,  the  people  paid  to  the 
railroad  companies  the  enormous  sum  of  $16,004,537,112.  The 
assessed  value  of  all  the  property  in  the  United  States  in  the 
year  1880  was  $16,902,993,543.  In  other  words,  we  have  paid 
to  the  railroad  companies,  in  twenty-one  years,  a  sum  almost 
equal  to  the  assessed  value  of  all  taxable  property  for  the  year 
1880.  Add  to  this  the  immense  sum  of  interest  we  have  paid 
to  creditors,  the  extortions  of  trusts  and  combines,  and  is  it 
any  wonder  that  we  are  struggling  in  the  throes  of  a  debt  of 
$32,000,000,000?  Never  before  in  the  history  of  the  world  were 
such  fabulous  fortunes  made  in  such  incredibly  short  tune. 
No  country  possesses  so  many  millionaires,  and  at  the  rate  we 
are  traveling,  in  a  few  years  no  country  will  possess  so  many 
paupers. 

The  following,  from  the  New  York  Recorder,  shows  an  ap- 
proximate distribution  of  our  wealth: 

"According  to  figures  from  reliable  sources,  there  were  in 
the  United  States,  in  1891, 13,000,000  families,  with  an  assessed 
wealth  of  $62,082,000,000,  of  which  there  were: 


78  A  New  Study  of  Political  Economy. 

70  families  worth 82.625,000,000 

90  families  worth 1,025,000,000 

100  families  worth 1,440,000,000 

135  families  worth 968,000,000 

360  families  worth 1,650,000,000 

1,753  families  worth 4,036,000,000 

6,000  families  worth 7,500,000,000 

7,000  families  worth 4,550,000,000 

11,000  families  worth 4,125,000,000 

14,000  families  worth 3,220,000,000 

16,500  families  worth 2,722,000,000 

30,000  families  worth 5,000,000,000 

75,000  families  worth 4,500,000,000 

200,000  families  worth 4,000,000,000 

1,000,000  families  worth 3,500,000,000 

2,000,000  families  worth 4,000,000,000 

9,620,000  families  worth 7,215,000,000 

"These  figures  show  that  40,000  persons  own  over  one-half 
of  the  wealth  of  the  United  States,  while  one-sixtieth  part  of 
our  people  own  over  two-thirds  of  the  entire  wealth  of  the 
country;  and  that  250,000  persons  own  75  per  cent,  of  the 
United  States.  These  tables  also  show  that  three-fourths  of 
our  families  are  not  worth  over  $600  to  the  family,  while  one- 
fourth  are  worth  over  814,000  to  the  family,  It  will  also  ap- 
pear by  a  small  calculation  that  one-half  of  these  families  are 
worth  less  than  $200  to  the  family. 

"Again,  while  25,000  families  have  an  aggregate  yearly  in- 
come of  not  less  than  $2,500,000,000  per  year,  or  $100,000  as  an 
average,  there  are,  according  to  Edward  Atkinson's  estimate, 
not  less  than  11,000,000  families  (estimated  at  five  to  the  fam- 
ily) who  have  an  income  which  does  not  exceed  1450  per  year, 
and  hardly  averages  $350.  Atkinson  further  estimates  that 
only  700,000  families  have  an  income  between  $450  and  $1,000  a 
year,  and  only  300,000  have  more  than  $1,000  yearly  income. 
Take  his  highest  figures  and  you  will  have: 

Families.  Av.  Income.  Total. 

11,000,000  $         350  $3,850,000,000 

700,000  700  490,000,000 

300,000  5,000  1,500,000,000 

25,000  100,000  2,500,000,000 

Which  proves. that  about  325,000  families  have  as  much  income 
as  11,700,000  families,  and  that  it  is  almost  impossible  for  the 
poorer  classes  to  accumulate  any  wealth  whatever." 

A  recent  number  of  the  Quarterly  Journal  of  Economics 
gives  the  following  statistics  of  the  number  of  laborers  out  of 


A  New  Study  of  Political  Economy.  79 

employment  in  some  of  our  prominent  cities:  Boston,  10,000; 
Worcester,  7,000;  New  Haven,  5,000;  Providence,  9,000;  New 
York,  100,000;  Utica,  16,000;  Newark,  19,000;  Philadelphia,  75,- 
000;  Baltimore,  10,000;  Wheeling,  3,000;  Cincinnati,  6,000; 
Cleveland,  8,000;  Columbus,  4,000;  Indianapolis,  5,000;  Chicago, 
200,000;  Detroit,  25,000;  Milwaukee,  20,000;  Grand  Rapids, 
6,000;  Minneapolis,  6,000;  St.  Louis,  80,000;  St.  Joseph,  2,000: 
Omaha,  2,000;  Butte  City,  Mon.,  5,000;  San  Francisco,  15,000; 
Total,  638,000. 

This  is  only  a  partial  list.  It  is  compiled  from  reports  of 
mayors,  chiefs  of  police  and  charity  organizations,  and  is,  no 
doubt,  approximately  correct.  It  is  safe  to  assume  that  2,000,- 
000  men  and  women  are  out  of  employment,  which  means  hun- 
ger and  privation  for  at  least  three  times  that  many  more  who 
are  dependent  on  them.  Well  may  every  true  American  ex- 
claim: "Whither  are  we  drifting?"  Wealth  concentrating  in 
the  hands  of  a  few,  and  the  people  losing  their  lands  and 
homes! 

The  Remedy. 

Daniel  Webster,  the  great  constitutional  lawyer,  said: 

"The  freest  government  cannot  long  endure  where  the 
tendency  of  the  law  is  to  create  a  rapid  accumulation  of  prop- 
erty in  the  hands  of  the  few,  and  to  render  the  masses  of  the 
people  poorer  and  dependent." 

We  are  the  victims  of  class  legislation.  We  are  a  nation 
of  debt  slaves.  There  is  no  time  to  stop  and  quibble  and  quar- 
rel over  the  question  as  to  who  is  responsible  for  the  class 
legislation  that  has  made  such  unequal  distribution  of  wealth 
possible.  The  remedy  offered  by  the  People's  Party  is  to  re- 
verse the  legislation  of  the  past,  and  throw  out  safeguards  to 
protect  the  people  of  the  future.  The  people  must  be  aided  to 
pay  their  debts  or  forever  remain  in  industrial  or  debt  slavery. 
And,  if  we  follow  the  teachings  of  Jefferson,  it  must  be  done 
quickly,  as  we  have  no  right  to  entail  this  debt  on  the  future 
generation.  Speaking  directly  upon  this  question,  vol.  3,  page 
103,  Jefferson's  Works,  he  says: 

"The  question  whether  one  generation  of  men  has  a  right 
to  bind  another  seems  never  to  have  been  started,  yet  it  is  a 
question  of  such  consequence  as  not  only  to  merit  decision,  but 
place,  among  the  fundamental  principles  of  every  government. 
That  no  such  obligation  can  be  transmitted  I  think  capable  of 
proof." 

What,  then,  is  the  remedy  proposed  by  the  People's  Party? 

To  return  at  once  to  the  fundamental  principles  of  gov- 
ernment. 


80  A  New  Study  of  Political  Economy. 

Abolish  banks  of  issue  and  let  the  government  issue  ita 
own  money. 

Wipe  out  all  monopolies,  one  after  another,  so  that  they 
can  make  no  further  exactions  from  the  people. 

When  this  is  done  and  the  people  have  an  opportunity 
they  will  soon  discharge  their  indebtedness. 

We  have  already  pointed  out  the  evils  resulting  from 
banks  of  issue.  We  have  it  from  the  best  authority  that  the 
recent  panic  was  precipitated  by  the  banks.  The  silver  con- 
vention held  at  Chicago,  composed  of  men  of  all  political 
parties,  declared: 

"The  distrust  is  not  of  the  government  or  its  money,  but 
of  the  banks,  which  have,  as  we  believe,  precipitated  the  pres- 
ent panic  on  the  country  in  an  ill-advised  effort  to  control  the 
action  of  Congress  on  the  silver  question  and  the  issue  of 
bonds." 

Col.  Robert  G.  Ingersoll  said: 

"This  is  a  bankers'  panic.  The  bankers  have  been  pre- 
dicting a  panic  for  years  and  have  done  all  they  could  to  ful- 
fill their  prediction.  They  tell  us  that  the  Sherman  law^has 
done  all  the  damage,  and  they  point  to  the  present  price  of 
silver  as  one  of  the  results  of  the  Sherman  law.  Certainly 
silver  did  not  fall  in  price  because  the  Sherman  bill  ma  de  a 
market  for  4,500,000  ounces  a  month.  You  cannot  put  down 
prices  by  buying.  Silver  has  fallen  because  it  has  been  de- 
monetized. The  value  of  a  thing  depends  somewhat  upon  its 
uses,  and  the  main  use  of  silver  has  been  destroyed.  Suppose 
gold  had  been  demonetized  instead  of  silver,  what  would  gold 
be  worth?" 

Senator  Hill,  of  New  York,  arraigned  the  bankers  of  the 
East  in  language  as  follows: 

"With  ghoulish  glee  they  welcomed  every  bank  failure, 
especially  in  the  silver  States,  little  dreaming  that  such  fail- 
ures would  soon  occur  at  their  own  doors.  They  encouraged 
the  hoarding  of  money;  they  inaugurated  the  policy  of  refus- 
ing loans  to  the  people,  even  upon  the  best  security;  they  cir- 
culated false  petitions,  passed  absurd  and  alarming  resolutions ; 
predicted  the  direst  disaster,  attacked  the  credit  of  the  gov- 
ernment, sought  to  exact  a  premium  upon  currency,  and  at- 
tempted in  every  way  to  spread  distrust  broadcast  throughout 
the  land.  The  best  financial  system  in  the  world  could  not 
stand  such  an  organized  and  vicious  attack  upon  it.  These 
disturbers — these  promoters  of  the  public  peril — represent 
largely  the  creditor  class,  the  men  who  desire  to  appreciate  the 
gold  dollar  in  order  to  subserve  their  own  selfish  interests, 
men  who  revel  in  hard  times,  men  who  drive  harsh  bargains 
with  their  fellow-men  in  periods  of  financial  distress,  and  men 


A  New  Study  of  Political  Economy.  81 

wholly  unfamiliar  with  the  true  principles  of  monetary 
science." 

Again  we  say,  abolish  the  banks  of  issue. 

Debts  are  payable  only  in  money.  Money  can  only  be  ob- 
tained by  parting  with  labor  or  the  products  of  labor,  unless 
we  steal  it,  or  have  it  given  to  us. 

When  money  is  scarce  it  takes  more  labor  or  more  prop- 
erty to  obtain  it.  Hence  the  great  crime  of  the  demonetiza- 
tion of  silver.  It  has  practically  doubled  the  burden  of  debt. 
Prices  have  been  going  down  and  will  continue  to  go  down  un- 
less this  conspiracy  to  enslave  labor  is  broken. 

Let  the  government  remonetize  silver  at  once.  Let  that 
be  supplemented  by  an  issue  of  paper  money  sufficient  to  in- 
crease the  volume  to  850  per  capita.  We  are  told  that  paper 
money  itsued  by  the  government  would  be  worthless  unless 
based  on  gold,  or  at  least  on  gold  and  silver.  Again  we  resort 
to  Thomas  Jefferson  for  our  authority.  In  his  letter  to  John 
W.  Epps,  dated  June  24, 1813,  which  can  be  found  in  Jeffer- 
son's Works,  vol.  6,  pages  139, 140,  Mr.  Jefferson  says: 

"And  so  the  nation  may  continue  to  issue  its  bills  as  far  as 
its  wants  require  and  the  limits  of  its  circulation  will  admit. 
Those  limits  understood  to  extend  with  us  at  present  to  $200,- 
000,000,  a  greater  sum  than  would  be  necessary  for  any  war. 
But  this,  the  only  resource  which  the  government  could  com- 
mand with  certainty,  the  States  have,  unfortunately,  fooled 
away,  nay,  corruptly  alienated  to  swindlers  and  shavers,  under 
the  cover  of  private  banks.  Say,  too,  as  an  additional  evil, 
that  the  disposable  funds  of  individuals  to  this  great  amount 
have  thus  been  withdrawn  from  improvement  and  useful  en- 
terprise, and  employed  in  the  useless,  usurious  and  demoraliz- 
ing practices  of  bank  directors  and  their  accomplices.  In  the 
war  of  1755  our  State  availed  itself  of  this  fund  by  issuing  a 
paper  money  bottomed  on  a  specific  tax  for  its  redemption, 
and  to  insure  its  credit,  bearing  an  interest  of  five  per  cent. 
Within  a  very  short  time  not  a  bill  of  this  emission  was  to  be 
found  in  circulation.  It  was  locked  up  in  the  chests  of  execu- 
tors, guardians,  widows,  farmers,  etc.  We  then  issued  bills 
bottomed  on  a  redeeming  tax,  but  bearing  no  interest.  These 
were  readily  received,  never  depreciated  a  single  farthing." 

Again,  in  a  letter  dated  September  11, 1813,  he  says: 

"Bank  paper  must  be  suppressed,  and  the  circulating 
medium  must  be  restored  to  the  nation  to  whom  it  belongs. 
It  is  the  only  fund  on  which  they  can  rely  for  loans:  it  is  the 
only  recourse  that  can  never  fail  them,  and  it  is  an  abundant 
one  for  every  necessary  purpose.  Treasury  bills  bottomed  on 
taxes,  as  may  be  found  necessary,  thrown  into  circulation,  will 
take  the  place  of  so  much  gold  and  silver." 


82  A  New  Study  of  Political  Economy. 

John  C.  Calhoun,  one  of  the  most  brilliant  statesmen  of 
the  South,  in  a  speech  in  the  United  States  Senate,  said: 

"Bank  paper  is  cheap  to  those  who  make  it,  but  very 
dear  to  those  who  use  it .  On  the  other  hand,  national  cur- 
rency, while  it  would  greatly  facilitate  its  financial  operations, 
would  cost  next  to  nothing,  but  would  give  to  every  branch  of 
industry  great  advantages.  And  now  I  undertake  to  affirm, 
without  the  fear  that  I  can  be  answered,  that  a  paper 
issued  by  the  government  with  a  single  promise  to  receive  it 
for  dues,  would  form  a  perfect  paper  circulation,  which  could 
not  be  abused  by  the  government;  that  it  would  be  as  uniform 
in  value  as  metals,  and  I  shall  be  able  to  prove  that  it  is 
within  the  Constitution  and  power  of  Congress  to  provide  such 
a  paper,  according  to  the  most  rigid  rule  of  construing  the 
Coonstitution. 

If  anything  was  wanting  to  prove  that  the  government 
had  the  power  to  issue  paper  money  when  money  was  needed, 
the  following  decision  of  the  United  States  Supreme  Court  is 
sufficient.  The  court  says: 

"There  are  times  when  the  exigencies  of  the  state  rightly 
absorb  all  subordinate  considerations  of  private  interest,  con- 
venience, or  feeling;  and  at  such  times  the  temporary  though 
compulsory  acceptance  by  a  private  individual  of  the  govern- 
ment credit,  in  lieu  of  the  debtor's  obligation  to  pay,  is  one  of 
the  slightest  forms  in  which  the  necessary  burdens  of  society 
can  be  sustained. 

"When  the  ordinary  currency  disappears,  as  it  often  does 
in  time  of  war,  when  business  begins  to  stagnate  and  general 
bankruptcy  is  imminent,  then  the  government  must  have 
power  at  the  same  time  to  renovate  its  own  resources  and  to 
revive  the  drooping  energies  of  the  nation  BY  SUPPLYING 
IT  WITH  A  CIRCULATING  MEDIUM.  What  that  me- 
dium shall  be,  what  its  character  and  qualities,  will  depend 
upon  the  greatness  of  the  exigency  and  the  degree  of  prompt- 
itude which  it  demands.  THESE  ARE  LEGISLATIVE 
QUESTIONS.  The  heart  of  the  nation  must  not  be  crushed 
out.  The  people  must  be  aided  to  pay  their  debts  and  meet 
their  obligations.  The  debtor  interest  of  the  country  repre- 
sents its  bone  and  sinew,  and  must  be  encouraged  to  pursue 
its  avocations.  If  relief  were  not  afforded,  universal  bank- 
ruptcy would  ensue,  and  industry  would  be  stopped,  and  gov- 
ernment would  be  paralyzed  in  the  paralysis  of  the  people." — 
12  Wallace,  464,  465. 

Now  with  regard  to  the  $50  per  capita.  In  Jefferson's 
letter  to  Mr.  Epps,  June  24,  1813,  he  stated  that  the  limit  of 
circulation  for  treasury  notes  bottomed  on  taxes  was  conceded 
to  be  $200,000,000.  At  that  time  the  population  of  the  United 


A  New  Study  of  Political  Economy.  83 

States  was  eight  millions.  We  have  now  eight  times  the 
population  and  might  with  the  same  degree  of  safety  issue 
eight  times  as  many  treasury  notes  bottomed  on  taxes, 
which  would  amount  to  $1,600,000,000  in  addition  to  our 
present  currency.  This  would  make  in  all  about  $3,300,000,- 
000  of  currency,  or  a  fraction  over  §50  per  capita. 

We  are  not  left  to  conjecture  what  the  effects  would  be. 
As  soon  as  government  assumes  absolute  control  of  the 
currency  confidence  will  be  restored,  money  will  come  from  its 
hiding-place  and  seek  investment  in  industrial  enterprises; 
the  idle  will  be  given  employment;  prices  will  advance  and 
people  be  given  an  opportmnity  to  pay  their  debts  and  become 
free.  We  have  already  indicated  h'ow  this  money  may  be 
placed  in  circulation.  Loan  it  direct  to  the  people;  buy  or 
build  railroads^  and  pay  it  out  in  the  ordinary  expenses  of  the 
government.  Loans  to  the  people  on  real  estate  can  be  made 
either  through  the  system  of  postal  savings  banks  which  our 
platform  calls  for,  or  by  the  general  government  loaning  it  to 
the  States  and  the  States  loaning  it  to  individuals  under  strict 
and  absolutely  safe  regulations.  We  are  asked,  how  would 
this  help  the  man  who  has  no  real  estate?  We  answer  by 
asking  how  does  the  free  coinage  of  silver  help  the  man  who 
has  no  silver?  It  helps  every  man  by  increasing  the  price  of 
the  products  of  his  labor  and  making  it  easier  for  him  to 
pay  his  debts.  He  is  benefited  in  the  general  prosperity 
which  would  follow  a  full  and  sufficient  circulating  medium. 

"If  the  whole  money  in  circulation  was  doubled,  prices 
would  double.  If  it  was  only  increased  one-fourth,  prices 
would  rise  one-fourth." 

Amasa  Walker,  in  his  "Science  of  Wealth,"  page  221,  says  : 

"Other  things  equal,  the  general  average  of  prices  is 
determined  by  the  quantity  of  currency  in  circulation,  and 
prices  advance  or  recede  as  that  is  increased  or  diminished. 
The  general  price  of  all  objects  of  value  will  ever  depend 
upon  the  quantity  of  currency  existing  in  the  country  in 
which  they  are  produced  and  sold.  This  is  an  economic  law 
as  certain  as  any  of  the  laws  of  nature." 

Ricardo  says  : 

"There  can  exist  no  depreciation  in  money  but  from 
excess ;  however  debased  a  coinage  may  become,  it  will  pre- 
serve its  mint  value  ;  that  is  to  say,  it  will  pass  in  circulation 
for  the  (so-called)  intrinsic  value  of  the  bullion  which  it  ought 
to  contain,  provided  it  be  not  in  too  great  abundance." 

David  Hume,  the  historian,  says  : 

"It  is  not  difficult  to  perceive  that  it  is  the  total  quantity 
of  the  money  in  circulation  in  any  country  which  determines 
what  portion  of  that  quantity  shall  exchange  for  a  certain 


84  A  New  Study  of  Political  Economy. 

portion  of  the  goods  or  commodities  of  that  country.  It  is 
the  proportion  between  the  circulating  money  and  the  com- 
modities in  the  market  which  determines  the  price." 

We  might  quote  hundreds  of  authorities  in  support  of  our 
position,  but  we  deem  it  unnecessary.  It  will  be  readily  seen 
that  the  power  that  controls  the  money  of  the  country  controls 
prices.  It  is  for  this  reason  that  the  banks  have  sought  con- 
trol of  the  currency.  The  contest  is  between  the  people  and  the 
banks.  With  $32,000,000,000  of  indebtedness  which  has  been 
forced  upon  the  people  by  a  decreasing  volume  of  money  in 
circulation,  with  silver  demonetized,  and  gold  made  the  only 
medium  of  payment,  with  the  banks  owning  the  bonds,  notes 
and  mortgages,  and  the  gold,  the  condition  of  our  people  is 
hopeless,  except  through  the  way  indicated  by  the  People's 
Party.  On  every  hand  there  is  work  to  be  done.  New  re- 
sources are  to  be  developed.  Millions  of  dollars  of  wealth 
await  the  vitalizing  hand  of  industry.  But  there  is  no  money 
to  infuse  life  into  the  arteries  of  industry.  Those  who  have 
money  refuse  to  invest  it  when  all  kinds  of  property  is  falling 
in  value.  The  bankers  have  got  a  corner  on  money.  They 
seek  to  increase  its  value  by  making  it  scarce.  Let  the  gov- 
ernment begin  the  issue  of  money,  and  it  will  break  this 
corner.  _  Instead  of  that  the  government  has  assisted  the 
bankers  in  their  conspiracy  by  striking  down  silver  and  making 
money  scarcer.  The  majority  of  the  representatives  in  Con- 
gress, of  both  political  parties,  have  helped  to  do  this  thing. 
It  is  a  question  for  the  people  to  settle,  whether  they  will 
longer  support  political  parties  who  foster  a  system  of  debt 
slavery  which  the  money  power  seeks  to  make  perpetual. 
We  are  told  that  if  you  raise  the  prices  on  what  you  have  to 
sell  it  will  not  benefit  you,  because  you  will  have  to  pay  pro- 
portionately higher  prices  for  what  you  buy.  This  is  only 
true  of  those  who  expect  to  spend  as  much  as  they  make — 
who  have  no  surplus.  But  to  the  industrious  man  who  seeks 
to  lay  by  something  for  a  rainy  day,  or  who  is  in  debt,  it  is 
quite  different.  Some  time  since  a  Mr.  W.  R.  Miller  had  pub- 
lished the  contents  of  a  leaf  taken  from  the  ledger  of  Burns  & 
Marshall,  a  firm  that  did  business  in  the  town  of  Smithville, 
Ark.,  in  1866.  It  was  published  in  the  Commonwealth,  and 
the  high  price  commented  on.  Here  is  the  clipping  from  the 
Commonwealth: 

"W.  R.  Miller  left  us  a  leaf  taken  from  an  old  ledger  of 
Burns  &  Marshall,  who  did  business  in  Smithville  in  1866. 
From  it  we  take  the  following  items  as  charged  on  Christmas 
day  of  that  yaer:  1  Ib.  tobacco,  SI;  1  lb.  sugar,  25  cents;  1 
quart  coal  oil,  40  cents;  3  yards  calico  at  35  cents  a  yard,  §1.05; 
1  quart  whisky,  $1.25;  bottle  to  put  it  in,  15  cents;  1  lb.  gun- 


A  New  Study  of  Political  Economy.  85 

powder,  $1;  1  Ib.  shot,  30  cents;  1  yard  bed  ticking,  80  cents;  1 
paper  pins,  20  cents;  2  yards  gingham,  $1.50;  1  pair  suspenders, 
il.25;  1  box  collars,  40  cents.  Compare  the  prices  of  what  peo- 
ple had  to  pay  for  goods  in  the  palmy  days  of  '66  with  the 
price  for  what  you  have  to  pay  our  merchants  of  the  present 
day,  and  there  is  quite  a  difference.  Mr.  Miller  keeps  the  page 
as  a  relic." 

Now  let  us  take  these  figures  as  a  basis  for  our  calcula- 
tion, and  make  a  comparison  between  then  and  now. 

PRICES  1866. 

2  Ib.  tobacco,  $1  Ib 8  2  00 

10  Ib.  sugar,  25c.  Ib 2  50 

1  gal.  coal  oil 1  60 

lO.yards  calico,  35c.  yard 3  50 

1  gal.  whisky 5  00 

1  jug 50 

1  Ib.  gunpowder 1  00 

3  Ib.  shot,  30c.  Ib 90 

8  yards  bed  ticking,  80c.  yard 6  40 

1  paper  pins 20 

10  yards  gingham,  75c.  yard 7  50 

I  pair  suspenders 1  25 

1  box  paper  collars 40 

Total..  $3295 

Cash..  $17705 


Total $210  00 

CREDIT. 

1  bale  cotton,  500  Ib.,  42c.  Ib $210  00 

We  want  W.  R.  Miller  to  examine  these  figures  well.  In 
1866  the  highest  for  cotton  was  52  cents,  and  the  lowest  32 
cents;  average,  42  cents.  The  goods  named  are  far  above  the 
customary  prices  for  that  year.  Yet  the  farmer  had  $177.25  to 
carry  home  with  him.  Now,  let  us  look  at  present  prices  of 
the  same  articles  in  this  year  of  1895. 

PRICES  1895. 

2  Ibs.  tobacco,  50c.  Ib $  1  00 

10  Ibs.  sugar 50 

1  gal.  coal  oil 10 

10  yds.  calico 80 

1  gal.  whisky  and  jug 3  00 

1  Ib.  gunpowder 40 


86  A  New  Study  of  Political  Economy. 

3  Ibs.  shot 25 

8  yds.  ticking  25c.  yard 2  00 

1  paper  pins 05 

10  yds.  gingham,  lOc.  yard 1  00 

1  pair  suspenders. .' 25 

1  box  paper  collars 10 

Total $    945 

Cash 15  55 

Total S  25  00 

CREDIT. 

1  bale  cotton,  500  Ibs.  5c.  Ib $  25  00 

Leaving  the  farmer  $15  55  to  take  home  with  him  in  1894, 
against  §177.05  in  1866,  a  difference  in  favor  of  1866  of  $161.50, 
and  this  $161.50  in  greenbacks  paid  $161.50  of  debt  just  the 
same  as  it  does  to-day. 

The  study  of  such  prices  as  quoted  by  W.  R.  Miller  is 
what  makes  Populists.  If  non-office-holding  Democrats  and 
Republicans  will  study  plain  facts  and  compare  the  times  now 
with  those  of  1866  they  will  all  be  Populists,  and  the  Demo- 
cratic and  Republican  parties  will  be  reduced  at  once  to  only 
the  office-holders. 

Having  assumed  control  of  the  currency,  and  adopted  a 
system  of  finance  in  the  interests  of  the  great  masses,  let  the 
government  then  proceed  to  throw  out  the  safeguards  indi- 
cated in  our  platform  for  the  future  protection  of  the  rights  of 
the  people. 

Let  it  abolish  every  trust  in  the  land. 

Let  it  institute  postal  savings  banks. 

Let  it  pass  a  law  providing  a  graduated  income  tax  that 
will  forever  in  the  future  prevent  the  accumulation  of  such 
immense  fortunes.  Let  it  provide  also  a  graduated  tax  on 
lands,  over  and  above  what  is  legitimately  used  by  the  owner, 
so  that  there  will  be  no  fortunes  made  in  land  speculation 
while  thousands  go  without  a  home. 

Let  it  gradually  buy  up  the  railroads,  telegraphs  and  tele- 
phones, at  prices  commensurate  with  the  present  cost  of  con- 
struction, and  if  the  companies  do  not  want  to  sell  at  those 
figures,  then  let  the  government  begin  the  construction  of 
lines  where  most  needed.  The  government  ownership  of  one- 
fourth  the  railroads  in  the  United  States  would  result  in  a 
great  reduction  of  rates.  Having  given  you  our  remedy,  we 


A  New  Study  of  Political  Economy.  87 

will    now    proceed  to  discuss  some  of  the  objections  urged 
against  our  party  and  its  measures. 

"THERE  CAN  BE  BUT  Two  PARTIES." 

We  are  told  that  there  can  be  but  two  parties.  We  are  not 
going  to  deny  the  truth  of  this  assertion,  but  we  do  insist  on 
being  one  of  the  two,  and  from  the  way  in  which  the  leaders  of 
the  two  old  parties  are  voting  together  in  Congress,  it  is  now 
plain  to  everybody  that  they  are  going  to  marry  and  will  con- 
stitute the  other  party. 

Nothing  is  plainer  than  that  there  can  be  only  two  sides 
to  a  question,  but  it  does  not  follow  that  two  parties  may  not 
take  the  same  side.  The  People's  Party  is  on  one  side  of  the 
great  questions  of  the  day.  The  two  old  parties  are  on  the 
other.  It  is  our  honest  opinion  that  the  wedding  of  these  two 
parties  should  take  place  soon  if  they  would  save  themselves 
from  disgrace.  It  is  strongly  suspected  that  they  have  been 
sleeping  together  in  the  same  political  bed.  We  see  no  reason 
for  a  postponement  of  the  marriage.  They  are  both  of  the 
same  political  faith.  Grover  Cleveland  stands  ready  to  give 
the  bride  away,  and  John  Sherman  is  willing  to  perform  the 
ceremony.  Let  the  marriage  take  place  and  the  offspring  be 
legitimatized. 

FIAT  MONEY. 

We  are  charged  with  wanting  to  flood  the  country  with 
fiat  money.  If  the  same  amount  of  money  per  capita  we  had 
after  the  war,  and  which  Thomas  Jefferson  concedes  as  proper, 
in  his  letter  to  Mr.  Epps,  is  "flooding  the  country,"  we  plead 
guilty  to  the  charge. 

We  plead  guilty  to  the  charge  of  "fiat."  We  will  agree  to 
eat  any  kind  of  a  dollar  which  may  be  brought  to  us  that  is 
not  fiat.  The  "fiat  fools"  are  those  who  don't  know  that 
money  that  is  not  fiat  is  not  money  at  all.  A  silver  dollar  is 
worth  100  cents,  and  will  buy  as  much  as  a  gold  dollar  because 
it  is  fiat.  Take  the  fiat  of  the  law  from  it  and  it  is  worth  only 
48  cents. 

Occasionally  we  are  told  that  the  government  can't  issue 
paper  money  unless  it  has  the  gold  and  silver  back  of  it.  This 
is  the  parrot-like  repetition  of  what  the  bankers  say.  That  is 
what  they  said  during  the  last  war.  -But  the  government  did 
issue  over  seventeen  hundred  millions  of  it.  If  the  govern- 
ment has  power  to  issue  it  to  pay  men  to  shoot  other  men 
down,  why  has  it  not  power  to  issue  it  to  pay  men  who  are 
idle  and  suffering  for  the  necessities  of  life,  to  construct  pub- 
lic works?  If  it  can  be  issued  for  the  purpose  of  destroying 


88  A  New  Study  of  Political  Economy. 

life,  why  can  it  not  be  issued  to  preserve  life?  If  it  can  issue  it 
for  the  purpose  of  putting  down  chattel  slavery,  why  can  it 
not  issue  it  for  the  purpose  of  wiping  put  debt  slavery?  The 
hypocritical  cry  that  it  can't  do  so  has  its  origin  in  hell. 

BUYING  THE  RAILROADS. 

It  is  amusing  to  see  our  opponents  construct  straw  houses, 
and  then  proceed  to  demolish  them.  It  is  like  the  action  of 
school-boys  madly  charging  a  mullen  stock,  except  that  the 
mullen  stock  is  a  more  tangible  object  than  our  opponents 
usually  conjure  up  in  their  imagination. 

These  elegant  gentlemen,  the  politicians,  who  are  so  de- 
voted to  the  dear  people's  interests  as  to  be  willing  to  make 
the  great  sacrifice  of  accepting  office  at  salaries  ranging 
from  $500  to  $5,000  a  year,  take  particular  delight  in  supposing. 
In  their  fertile  imaginations  they  suppose  a  plan,  charge  it  up 
to  the  Populists,  and  then  jump  onto  it  and  demolish  it.  Of 
course  they  take  great  care  to  suppose  a  plan  that  is  weak 
enough  in  its  structure  for  them  to  demolish.  Some  of  these 
conjurations  are  as  silly  as  the  supposition  that  we  are  in  favor 
of  shoeing  horses'  tails. 

The  People's  Party  declares  in  favor  of  government  owner- 
ship of  railroads  and  telegraph  lines.  But  nowhere  in  its 
platform  does  it  indicate  a  plan  to  secure  this  end.  If  our  op- 
ponents are  disposed  to  act  fair  why  not  concede  that  we 
favor  some  practical  plan  for  carrying  out  our  declaration? 
Why  charge  that  we  are  in  favor  of  purchasing  all  the  rail- 
roads at  once  at  their  capitalized  value,  including  the  watered 
stock,  and  issuing  bonds  for  the  amount  and  taxing  the  peo- 
ple to  pay  the  bonds?  No  Populist  has  ever  proposed  any 
such  thing.  There  is  no  necessity  for  doing  any  such  thing. 
The  railroads  could  be  bought  and  paid  for  within  twenty 
years  out  of  their  net  earnings  and  savings  without  taxing  the 
people  one  cent,  or  increasing  the  present  rates  of  freight  and 
passenger  tariff.  But  the  people  are  already  taxed  on  every 
dollar  of  capital  represented  by  railroad  bonds  and  stocks  to 
the  extent  of  ten  thousand  million  dollars.  They  are  taxed  in 
the  freight  and  passenger  rates  which  they  have  to  pay  the 
railroad  companies.  What  the  People's  Party  desires  is  that 
the  money  which  now  goes  to  pay  dividends  on  stock  and  in- 
terest on  bonds,  shall  go  towards  purchasing  the  railroads  and 
eventually  owning  and  operating  them  at  greatly  reduced 
rates.  In  an  able  and  well  written  article  in  the  Arena,  Mr. 
C.  Wood  Davis,  a  practical  railroad  man  and  reliable  statisti- 
cian, figures  the  actual  savings  by  government  ownership  of 
railroads  as  follows: 


A  New  Study  of  Political  Economy.  89 

Savings  from  consolidation  of  depots  and  staffs  —  8  20,000,000 

Savings  from  exclusive  use  of  shortest  route 25,000,000 

Savings  in  attorneys'  salaries  and  legal  expenses. . .  12,000,000 

Savings  from  abrogation  of  the  pass  evil 30,000,000 

Savings  from  abrogation  of  commission  system 20,000,000 

Savings  from  dispensing  with  high-priced  officers 

and  staffs 4,000,000 

Savings  by  disbanding  traffic  associations 4,000,000 

Savings  by  dispensing  with  presidents,  etc 25,000,000 

Savings  by  abolishing  (all  but  local)  officers,  solic- 
itors, etc 15,000,000 

Savings  of  five-sevenths  of  advertising  accounts. . .  5,000,000 

Total $160,000,000 

In  addition  to  this  there  would  be  saved: 

The  annual  political  corruption  fund $  30,000,000 

Secret  rebates  to  directors,  etc.,  who  compose  vari- 
ous trusts  and  combinations 50,000,000 

All  dividends  and  surplus 134,000,000 

Total f214,000,000 

Add  Mr.  Davis'  figures 160,000,000 


Total $374,000,000 

Suppose  that  the  government  should  purchase  the  rail- 
roads at  their  actual  cost  and  issue  bonds  bearing  two  per  cent 
interest  per  annum.  The  best  authorities  concede  that  at 
least  one-half  of  the  present  capitalization  of  the  roads  is 
water.  But  we  will  allow  them  to  be  valued  at  §6,000,000,000. 
The  annual  interest  charge  on  this  sum  for  the  first  year  would 
be  $120,000,000.  We  have  already  figured  the  net  savings  and 
dividends  from  the  roads  at  8374,000,000.  Deduct  the  interest 
on  bonds  from  this  amount,  and  it  leaves  $254,000,000  to  go  into 
a  sinking  fund  to  pay  the  bonded  indebtedness.  The  interest 
would  grow  less  each  year  as  the  principal  was  being  paid,  and 
within  twenty  years  the  entire  debt  will  have  been  discharged 
and  not  a  dollar  of  paper  money  issued  for  the  purpose,  and 
not  a  cent  in  taxes  collected  from  the  people,  other  than  that 
which  they  now  pay  and  which  goes  into  the  pockets  of  rich 
railroad  magnates.  The  question  is  not  whether  the  people 
w  ill  assume  the  burden  of  debt— it  is  already  on  them — but 
whether  they  will  make  provisions  to  get  from  under  it,  and  in 
the  future  lower  the  rates  of  transportation  to  less  than  half 
what  they  are  now. 

It  is  claimed  that  if  the  government  was  to  assume  the 
ownership  and  operation  of  the  railroads  it  would  create 


90  A  New  Study  of  Political  Economy. 

such  an  army  of  men  dependent  on  political  patronage  and  the 
caprices  of  the  party  in  power,  that  it  would  constitute  a  men- 
acing danger  to  our  liberties  and  a  fruitful  source  of  political 
corruption.  Under  our  present  defective  system  of  civil  serv- 
ice, where  the  principle  laid  down  is  "to  the  victor  belong  the 
spoils,"  and  it  is  a  wild  rush  for  the  hog-trough  to  see  who  will 
get  the  most  swill,  I  admit  the  weight  of  this  objection.  But 
the  People's  Party  has  provided  for  this.  It  recommends  in 
its  platform  an  amendment  to  the  Constitution  by  which  all 
persons  engaged  in  the  public  service  shall  be  placed  under 
civil  service  regulations  af  the  most  rigid  character.  It  might 
be  well  to  adopt  the  regulations  employed  in  the  regular  army, 
permitting  no  one  to  vote  or  to  be  a  delegate  in  a  political  con- 
vention while  thus  in  the  employ  of  the  government.  So  far 
as  corruption  is  concerned  no  sane  man  believes  there  would 
be  one-fourth  as  much  as  there  is  now.  It  is  an  open  secret 
that  railroad  corporations  control  courts,  conventions  and  na- 
tional and  State  legislatures.  Well  might  Senator  Peffer 
make  use  of  the  following  language: 

"The  railroad  interest  is  a  powerful  one.  It  extends 
throughout  the  entire  country.  There  is  hardly  a  county  in 
the  Union  that  has  not  one  or  more  railway  lines  running 
through  it,  and  there  is  not  a  mile  of  that  vast  system  that  is 
not  represented  locally  by  at  least  one  of  the  best  lawyers  to 
be  found  in  the  region. 

"If  all  the  lawyers  who  are  in  the  employ  or  retained  in 
the  interest  of  the  great  railway  systems  in  the  country 
were  marshaled  together  they  would  form  an  army  as  large  as 
Gen.  Jackson  had  at  New  Orleans,  larger  than  Gen.  Scott  had 
at  Lundy  B  Lane.  If  you  put  together  the  different  armies 
made  up  of  lawyers  representing  the  different  great  railway 
systems  of  the  country  you  will  find  that  the  influence  of  the 
railway  system  reaches  out  into  every  county  in  the  United 
States." 

In  a  recent  investigation  of  the  affairs  of  the  Santa  Fe 
railroad,  it  was  found  that  seven  million  dollars  was  charged 
as  having  been  paid  back  in  rebates  to  shippers,  but  two  mil- 
lions of  it  was  BO  unsatisfactorily  accounted  for  that  it  was  no 
doubt  stolen  by  the  officers  of  the  road.  It  seems  to  have  be- 
come a  well-settled  fact  that  the  railroad  companies  violate  the 
laws  with  impunity,  and  their  influence  has  become  so  power- 
ful that  they  are  beyond  control  through  the  ordinary  course 
of  law.  That  they  have  been  the  most  fruitful  source  of 
political  corruption,  let  the  history  of  the  land  grants,  subsi- 
dies of  bonds,  control  of  courts  and  legislatures  testify.  In- 
deed, this  is  one  of  the  very  best  reasons  why  the  government 


A  New  Study  of  Political  Economy.  91 

should  own  and  operate  the  roads  as  it  does  the  postal  system. 
THE  SUB-TREASURY. 

It  is  charged  that  we  favor  the  sub-treasury  system  as 
proposed  by  the  Alliance,  and  our  opponents  tax  their  inge- 
nuity to  build  straw  men  to  tear  down.  The  declaration  of 
our  platform  is  plain  on  this  question.  It  says  that  we  favor 
the  distribution  of  money  through  the  sub-treasury,  or  a  bet- 
ter system.  Our  opponents  think  there  is  a  better  system, 
and  I  think  so,  too.  In  fact,  I  believe  that  nearly  all  our 
party  think  so.  I  believe  that  the  Omaha  convention  thought 
so  when  it  put  a  declaration  in  the  platform  favoring  govern- 
ment postal  banks.  We  had  made  rapid  strides,  educating 
the  people  along  the  sub- treasury  lines.  It  was  thought  best 
by  some  of  our  people  not  to  drop  it  entirely  at  that  time. 
The  principle  involved  was  all  right.  The  details  of  the  plan 
were  never  settled  upon  except  by  Democratic  orators  and  Dr. 
Macune,  who  tried  to  sell  the  People's  Party  in  1892,  but  failed 
to  deliver  the  goods.  It  is  generally  conceded  now  that  the 
only  utility  about  the  sub-treasury  plan  is  to  furnish  Demo- 
cratic orators  a  theme  to  talk  about  -something  they  know 
nothing  of— in  order  to  give  the  people  a  rest  on  the  tariff 
racket. 


"ABOVE  all  things  good  policy  is  to  be  used,  that  the 
treasures  and  moneys  of  the  state  be  not  gathered  into  a  few 
hands;  for,  otherwise,  a  state  may  have  great  stock  and  yet 
starve.  And  money  is  like  muck,  not  good  except  spread. 
This  is  done  by  suppressing,  or  at  least  keeping  a  strait 
hand  upon  the  devouring  trade  of  usury,  engrossing,  great 
pasturages  and  the  like."  —  Bacon, 

The  wise  of  all  ages  have  ever  put  the  same  estimate  upon 
the  injustice  and  the  danger  of  centralizing  the  wealth  and 
resources  of  a  nation  in  the  hands  of  a  few  of  its  citizens. 
Bacon  saw  it  three  hundred  years  ago,  the  thoughtful  see  it 
now.  It  is  more  unjust  and  dangerous  now  than  in  Bacon's 
time,  for  the  degree  and  rapidity  of  centralization  is  greater 
now  than  then. 


"  TRUTH  crushed  to  earth  shall  rise  again. 

The  eternal  years  of  God  are  hers; 
But  error,  wounded,  writhes  with  pain 
And  dies  among  his  worshipers."  —  Byron. 


4i»  "  In  this  great  contest  the  brains  and  muscles  of  the  South 
and  West  must  unite,  for  self-defense,  against  the  cunning  and 
aggression  of  the  Northeastern  part  of  the  Union" 

— IGNATIUS  DONNELLY,  1874. 


SECTIONALISM  IN  AMERICAN  POLITICS. 

% 

C^ECTIONALISM  first  made  its  appearance  in  American 
**J  politics  in  1808,  when  Pinckney  was  defeated  by  Madison, 
the  Federalist  Party  losing  every  part  of  the  country  except 
New  England.  The  civil  war  arrayed  the  North  against  the 
South,  and  every  reader  of  recent  history  knows  how  the 
"bloody  shirt"  was  waved  to  foster  sectional  feeling  and  to  di- 
vert the  minds  of  the  voters  from  really  important  issues.  The 
People's  Party  has  broken  up  the  "solid  South,"  and  veterans 
who  wore  the  gray  are  now  fraternizing  everywhere  with  those 
who  wore  the  blue.  The  sectionalism  in  American  politics 
to-day  runs  along  other  lines  than  those  of  war  sentiment.  It 
is  now  the  Northeast  against  the  rest  of  the  Union,  just  as  it 
was  New  England  against  the  rest  of  the  Union  in  the  days  of 
Madison. 

Hon.  W.  J.  Bryan,  in  a  newspaper  article  dated  February 
16, 1895,  calls  attention  to  a  speech  made  by  ex-Speaker  Reed 
in  Boston,  in  1893,  quoting  the  following  extract: 

"And  let  me  tell  you  right  here  that  there  is  no  State  so 
deeply  interested  [in  protection]  as  the  State  of  Massachusetts. 
If  it  were  not  for  its  condition  I  should  say,  'Let  these  men 
try  it.  Let  us  have  the  lesson  of  free  trade  burned  into  the 
quick,  and  then  let  us  have  peace.'  [Applause.]  But  when 
Massachusetts  sits  around  to  mourn  her  destroyed  factories, 
her  ruined  industries,  her  closed  machine  shops,  she  sits 
around  to  mourn  for  eternity;  for  if  they  are  once  destroyed 
the  omnivorous  West  will  do  the  manufacturing  for  the  coun- 
try. [Applause.]  You  have  the  start;  you  have  the  power; 
you  have  the  prestige.  You  can  keep  it  or  you  can  throw  it 
away,  and  the  only  way  in  which  you  can  keep  it  is  by  making 
the  voice  of  the  majority  of  your  people  to  be  heard,  and  to  be 
heard  across  the  country.  [Applause.]" 

"I  do  not  mention  this,"  says  Mr.  Bryan,  "as  vindicating 
the  cause  of  the  new  sectionalism,  for  I  believe  the  tariff  ques- 

93 


Sectionalism  in  American  Politics.  93 

tion  to  be  in  the  process  of  settlement,  but  because  so  eminent 
an  authority  as  Mr.  Reed  here  made  an  appeal  to  the  people  of 
Massachusetts  to  support  a  certain  revenue  policy,  first,  be- 
cause Massachusetts  was  more  interested  in  it  than  any  other 
State,  and,  second,  because  a  reversal  of  the  policy  would 
transfer  the  manufactures  of  New  England  to  the  omnivor- 
ous West. 

"The  old  sectionalism  was  founded  upon  slavery,  and  as 
the  years  went  on  the  conflict  became  more  bitter  until  it  re- 
sulted in  the  attempt  at  separation.  It  only  requires  a  glance 
at  recent  legislation  to  show  the  difference  which  is  becoming 
more  and  more  noticeable  between  the  opinions  of  those  living 
in  the  Northeast  and  the  opinions  of  those  who  live  in  the 
South  and  West,  but  the  remedy  will  be  a  peaceable  one. 
The  geographical  division  is  not  as  clearly  defined  as  the  Ma- 
son and  Dixon  line,  but  it  is  being  made  more  distinct  by  each 
vote  taken.  The  slavery  issue,  as  feeling  grew  more  intense, 
entered  into  nearly  every  public  question,  because  every  im- 
portant question  would  to  a  greater  or  less  extent  affect  slav- 
ery. The  money  question  is  the  great  question  which  divides 
the  Northeast  from  the  rest  of  the  country,  and  there  is 
scarcely  a  public  question  of  any  importance  which  the  money 
question  does  not  creep  into  or  fasten  upon  in  some  way.  The 
Northeastern  States  believe  in  a  single  gold  standard;  the 
South  and  West  believe  in  bimetallism.  This  division  is  as 
natural  as  the  former  division  between  the  North  and  the 
South.  The  slave-holder  of  a  generation  ago  was  as  kind  and 
generous  and  hospitable'  as  the  New  Englander,  but  he  had 
inherited  slaves  as  property  or  purchased  them,  and  he  felt 
that  any  attempt  to  take  them  away  from  him  was  a  violation 
of  his  rights.  That  was  perfectly  natural.  He  also  believed 
that  the  slave  was  better  off  as  a  chattel  than  he  would  be  as 
a  free  man.  The  people  who  lived  in  the  North  did  not  own 
slaves,  and  therefore  to  them  the  abolition  of  slavery  brought 
no  direct  pecuniary  loss,  and  it  was  much  easier  for  them  to 
advocate  emancipation. 

"The  gold  standard  appreciates  the  value  of  money,  and 
since  the  Northeastern  States  own  a  great  deal  of  capital  and 


94  Sectionalism  in  American  Politics. 

loan  money  to  other  parts  of  the  country  they  secure  what 
might  be  called  an  unearned  increment.  To  say  that  they  en- 
joy this  unearned  increment  is  to  say  that  they  are  human, 
and  it  is  not  strange  that  they  are  able  to  convince  themselves 
that  what  is  good  for  them  must  be  good  for  the  rest  of  the 
people.  The  people  in  the  South  and  West  are,  relatively 
speaking,  debtors,  and  as  the  purchasing  power  of  the  dollar 
increases  they  feel  their  pecuniary  burdens  becoming  heavier. 
To  say  that  they  do  not  enjoy  contributing  to  the  unearned 
increment  of  their  Eastern  brethren  is  to  say  that  they  are 
also  human.  Before  the  war  there  were  many  in  the  South 
who  owned  slaves  and  yet  favored  emancipation,  while  there 
were  many  in  the  North  who  defended  the  institution  of  slav- 
ery, although  not  slave-owners  themselves.  So  it  is  to-day. 
Scattered  throughout  the  East  will  be  found  many  who  oppose 
the  gold  standard,  some  on  the  ground  that  it  is  morally 
wrong  to  change  the  contract  between  debtor  and  creditor,  and 
others  on  the  ground  that  the  East  will  find  that  its  share  of 
the  general  prosperity  to  be  secured  by  the  restoration  of  bi- 
metallism will  be  greater  than  its  present  share  of  the  limited 
prosperity  possible  under  a  gold  standard.  There  are  also  to 
be  found  throughout  the  South  and  West  those  who  are  in 
favor  of  the  gold  standard,  some  because  they  are  theoretically 
opposed  to  bimetallism,  and  others  because  they  are  connected 
with  Eastern  financial  concerns,  but  it  is  as  true  to-day  as  it 
was  forty  years  ago  that  opinion  and  interest  are  generally 
found  on  the  same  side  of  the  question. 

"A  great  deal  is  being  said  now  about  the  selection  of  a 
Western  man  for  President,  and  the  reason  for  this  talk  is 
found  in  the  fact  that  a  President  with  the  veto  power  can 
prevent  new  legislation  or  the  repeal  of  existing  laws  if  sup- 
ported by  more  than  one-third  of  either  house.  For  instance, 
Mr.  Cleveland  was  able  to  prevent  the  coining  of  the  seignior- 
age, although  a  considerable  majority  in  both  houses  voted 
for  the  bill.  Mr.  Cleveland  lives  in  New  York,  and  naturally 
imbibes  the  sentiment  prevalent  in  the  metropolis,  but  see 
what  an  advantage  the  Northeast  secures  when  it  controls  the 
veto  power.  That  the  sectional  spirit  is  growing  cannot  be 


Sectionalism  in  American  Politics.  95 

denied,  although  men  will  differ  as  to  the  remedy  for  it.  Our 
"Northeastern  brethren  will  say  that  there  is  a  simple  cure — 
namely,  that  the  South  and  West  should  quit  finding  fault 
with  Eastern  ideas,  while  the  remedy  proposed  on  the  other 
side  is  that  the  East  should  be  satisfied  with  equal  opportuni- 
ties and  equal  rights  and  quit  trying  to  devour  everything  in 
sight.  The  West  and  the  South  are  strong  enough  in  numbers 
to  elect  a  President  and  control  both  houses  of  Congress;  when 
they  do  so  they  will  restore  the  gold  and  silver  coinage  of  the 
Constitution  and  remedy  what  they  regard  as  the  abuses  of 
government.  This  union  is  one  of  the  certainties  of  the  fu- 
ture; its  exact  date  only  is  uncertain." 

In  that  excellent  work,  "Seedtime  and  Harvest,"  Mr.  S.  S. 
King  has  collated  some  startling  facts  as  to  the  accumulation 
of  wealth  in  the  Northeastern  States.  The  computation  is 
from  the  official  census  reports  of  1890  and  is  therefore  beyond 
question. 

The  State  of  Massachusetts  gained  more  wealth  in  the 
decade  1880-90  than  the  States  of  Indiana,  Illinois,  Iowa,  Ne- 
braska, Louisiana,  Mississippi,  Alabama,  Georgia  and  North 
Carolina  combined. 

Pennsylvania  gained  more  wealth  in  the  same  period  than 
Indiana,  Illinois,  Iowa,  Nebraska,  Louisiana,  Mississippi, 
Alabama,  Georgia,  North  Carolina,  Kansas,  Kentucky  and 
Florida  combined. 

New  York  gained  more  wealth  than  Indiana,  Illinois, 
Iowa,  Nebraska,  Louisiana,  Mississippi,  Alabama,  Georgia, 
North  Carolina,  Kansas,  Kentucky,  Florida,  Tennessee,  Vir- 
ginia and  West  Virginia  combined. 

Indiana,  Illinois,  Iowa,  Nebraska,  Louisiana,  Mississippi, 
Alabama,  Georgia,  North  Carolina,  Kansas,  Kentucky,  Flor- 
ida, Tennessee,  Virginia,  West  Virginia,  Missouri,  Arkansas, 
South  Carolina,  Delaware,  Maryland  and  Ohio,  twenty-one 
producing  States  forming  the  great  body  of  the  Union,  a  won- 
derland of  diversified  resources,  with  six  times  as  much  land 
and  twice  as  many  people  to  cultivate  it,  were  able  to  accumu- 
late one-half  as  much  wealth  in  the  period  named  as  the  nine 
manufacturing,  bondholding,  banking,  money-lending  and 


96  Sectionalism  in  American  Polities. 

railroad-owning  States  of  Maine,  New  Hampshire,  Vermont, 
Massachusetts,  Connecticut,  Rhode  Island,  New  York,  Penn- 
sylvania and  New  Jersey. 

The  great  producing  body  of  the  Union  is  comprised  of 
these  twenty-one  States.  Texas  was  not  included  because  its 
wealth-gain  was  derived  from  ranch  stock  rather  than  agricul- 
ture. This  is  not  saying  that  Texas  is  not  a  great  agricultural 
State.  But  in  addition  to  its  agriculture  it  had  had  the  other 
great  industry  of  stock-raising  on  wild  lands.  Vast  fortunes 
have  been  made  from  that  industry,  and  these  vast  fortunes 
give  Texas  a  great  wealth-gain.  The  gain  is  not  from  agricul- 
ture, as  Texas  people  will  freely  admit.  The  three  Northern 
pine-tree  States,  Minnesota,  Wisconsin  and  Michigan  were  not 
included  in  these  comparisons,  because  their  large  wealth- 
gains  were  derived  from  protected  lumber  monopolies  rather 
than  agriculture,  as  the  farmers  of  those  States  well  know. 
The  new  States  and  territories  to  the  westward  were  not  con- 
sidered, because  too  young  to  furnish  valuable  lessons.  The 
purpose  was  to  contrast  those  States  engaged  in  agriculture 
with  those  engaged  in  manufactures,  transportation  and 
banking. 

It  was  largely  of  the  States  named  above  as  the  producing 
States  that  Senator  Ingalls  wrote  (Lippincott's  Magazine, 
June,  1892):  "Sparsely  inhabited,  with  rude  and  unscientific 
methods,  their  resources  hardly  touched,  the  States  of  the  Mis- 
issippi  Valley  last  year  produced  more  than  three-quarters  of 
the  sugar,  coal,  corn,  iron,  oats,  wheat,  cotton,  tobacco,  lead, 
hay,  lumber,  wool,  pork,  beef,  horses  and  mules  of  the  entire 
country,  together  with  a  large  fraction  of  its  gold  and  silver. 
Their  internal  commerce  is  already  greater  than  all  the  foreign 
commerce  of  the  combined  nations  of  the  earth." 

These  constant  drains  of  wealth  from  the  producing 
States  into  the  nine  States  which  may  be  called  the  wealth 
district  are  the  cause  of  the  new  sectionalism  in  American 
politics.  The  annexed  diagram  is  taken  from  Mr.  King's  book. 
It  shows  how  the  wealth  of  the  nation  converges  largely  into 
the  nine  Northeastern  States  and  into  the  three  Northern 
States  which  form  the  lumber  district.  Texas  and  the  States 


Sectionalism  in  American  Politic*. 


97 


and  territories  to  the  westward,  and  Minnesota,  Nebraska 
and  Kansas,  are  not  shown  in  the  illustration.  Some  are  too 
young  to  be  of  any  service  in  these  comparisons,  the  popula- 
tion of  others  is  increased  so  largely,  so  much  land  has  changed 
from  government  to  individual  ownership,  some  are  so  remote 


from  the  body  of  the  nation,  and  in  others  the  causes  operat- 
ing are  so  different  from  the  causes  operating  in  the  Missis- 
sippi Valley,  that  to  include  them  in  the  illustration  would  be 
manifestly  unfair  and  tend  to  obscure  rather  than  enlighten; 
but  of  those  portions  of  the  country  shown  in  the  chart  Mr. 
King  clearly  establishes  the  following  facts: 

The  lumber  district  (the  three  pine-tree  States  of  Minne- 
sota, Wisconsin  and  Michigan),  with  seven  per  cent,  of  the  en- 
tire population  of  the  nation,  held  twelve  per  cent,  of  the 
wealth-gain  of  the  nation  from  1880  to  1890. 

The  wealth  district  (the  nine  North  Atlantic  States 
named)  with  twenty-nine  per  cent,  of  th«  entire  population  of 


98  Sectionalism  in  American  Polities. 

the  nation,  held  forty-one  per  cent  of  the  total  wealth-gain. 

Hie  produce  district  (the  twenty-one  States  mentioned 
forming  the  body  of  the  nation),  with  fifty -six  per  cent,  of  the 
entire  population,  kept  only  twenty -three  per  cent,  of  the  total 
wealth-gain. 

Thus  JB  seen  the  exceedingly  unequal  distribution  of  the 
wealth  gain  considered  with  reference  to  the  geographical  di- 
YKKHis  indicated.  This  produce  district,  the  twenty -one 
States,  can  feed  and  clothe  the  world.  Its  fifty-six  per  cent  of 
the  entire  population  of  the  nation,  living  on  fruitful  soil. 
should  accumulate  at  least  its  proportionate  percentage  of  the 
wealth-gain,  instead  of  only  twenty-three  per  cent.  The 
twenty-nine  per  cent,  of  the  entire  population,  living  among 
the  worn-out  hfHq  of  New  England,  should  not  accumulate 
more  than  their  proportionate  percentage  of  wealth,  and  when 
that  percentage  goes  up  to  forty -one,  something  is  wrong 
=o:r.e~ie:r.  It  behooves  the  patriot  to  seek  to  discover  where 
the  wrong  is.  It  is  not  in  the  figures.  They  are  official. 
Those  relating  to  population  are  from  Official  Census  Bulletin 
No.  16,  and  those  relating  to  wealth  from  No.  104. 


"  TRUTH  forever  on  the  scaffold, 

Wrong  fore  ver  on  the  throne. 
But  the  scaffold  sways  the  future, 

And  behind  the  dim  unknown 
Standeth  God  within  the  shadow, 

Keeping  watch  above  his  own."— Holme*. 


"  ASD  how,  like  forts,  to  which  beleaguers  win 
Unhoped-for  entrance  through  some  friend  within, 
One  clear  idea,  wakened  in  the  breast 
By  memory's  magic,  lets  in  all  the  rest." — Moore. 


"  GOD  is  a  worker.     He  has  thickly  strewn 
Infinity  with  grandeur.     God  is  love; 
He  shall  yet  wipe  Creation's  tears, 
And  all  the  world  shall  summer  in  His  smile.' 


*  "Property,  or  the  dominion  of  man  aver  external  objects, 
has  its  origin  from  the  Creator,  as  his  gift  to  mankindP — 
BLACKSTONE  (Dunlap's  Manual  of  the  General  Principles  oj 
Law}. 


THE  LAWS  OF  PROPERTY, 

*% 

Tl  MEMORABLE  occasion  in  the  history  of  American 
*  *  politics  was  on  the  evening  of  October  6, 1894,  when  the 
venerable  Lyman  Tmmbull  addressed  a  vast  audience  at  Cen- 
tral Music  Hall,  Chicago.  What  he  said  about  the  laws  of 
property  is  now  of  special  interest  to  reformers  and  students 
of  political  economy: 

It  is  chiefly  the  laws  of  property  which  have  enabled  the 
few  to  accumulate  vast  wealth  while  the  masses  live  in  pov- 
erty. For  many  generations  our  laws  hare  been  framed  with 
a  view  to  the  claims  of  property  rather  than  the  rights  of  man. 
For  ages  the  money  power  has  controlled  legislation  the  world 
over,  and,  I  am  sorry  to  say,  has  exercised  a  controlling  influ- 
ence in  our  own  land  for  many  years.  In  the  language  of  the 
Declaration  of  Independence:  "All  men  are  created  equal  and 
endowed  by  their  Creator  with  certain  inalienable  rights;  that 
among  these  are  life,  liberty,  and  the  pursuit  of  happiness." 
If  man  has  an  inalienable  right  to  life,  then  he  has  a  right  to 
the  means  which  sustain  life,  and  of  which  he  cannot  be  justly 
deprived  by  laws  which  permit  one  man,  or  set  of  men,  to  so 
absorb  the  means  of  life  as  not  to  leave  sufficient  to  sustain 
the  lives  of  all.  If  man  has  an  inalienable  right  to  liberty, 
then  he  cannot  be  justly  deprived  of  liberty  by  another  who 
assumes  the  right  at  his  mere  discretion  to  abridge  it.  If  man 
has  an  inalienable  right  to  the  pursuit  of  happiness,  then  he 
cannot  be  justly  deprived  of  that  right  by  laws  interposed  in 
the  way  of  its  pursuit. 

Do  such  laws  exist,  and  if  so,  how  came  they  into  exist- 
ence? 

In  Great  Britain,  whence  we  have  derived  most  of  our 
laws  of  property,  the  policy  is  to  build  up  great  estates. 
Hence,  by  the  laws  of  that  country,  land  descends  to  the 
eldest  son,  to  the  exclusion  of  the  other  children.  The  effect 
of  this  is  to  limit  the  ownership  of  land  to  a  few  persons. 
Thirty-four  persons  in  that  country  own  six  million  two  hun- 
dred and  eleven  thousand  acres  of  land.  The  Duke  of  Suther- 
land is  said  to  own  one  million  three  hundred  and  fifty-eight 

99 


100  The  Law*  of  Property. 

thousand  acres,  and  a  few  other  dukes  and  earls  own  a  great 
proportion  of  the  land  of  the  United  Kingdom.  What  has 
brought  about  this  wide  difference  in  the  ownership  of  land? 
Certainly  the  few  who  own  the  millions  of  acres,  from  which 
they  derive  revenue,  in  some  instances  of  more  than  five  hun- 
dred thousand  dollars  annually,  in  rentals,  have  not  earned 
these  vast  estates  by  their  own  industry,  but  on  the  contrary 
it  is  by  force  of  statutory  enactments  that  these  vast  estates 
have  been  accumulated  and  perpetuated  in  few  hands. 

In  this  country  we  have  abolished  the  laws  of  primogeni- 
ture, by  which  the  eldest  son  inherited  the  landed  estate  of 
his  ancestor,  but  here  vast  estates  are  being  rapidly  accumu- 
lated in  few  hands,  and  this  is  especially  true  during  and  since 
the  war  of  the  rebellion.  In  1860  there  were  few  millionaires 
and  few  large  fortunes  m  this  country,  but  since  then  a  rich 
class  has  sprung  up,  so  that  in  1890,  according  to  reliable  sta- 
tistics, ten  per  cent,  of  the  people  own  as  much  wealth  as  the 
other  ninety  percent.  In  1890  there  were  12,690,182  families 
in  the  United  States,  and  according  to  Geo.  K.  Holmes,  in  the 
Political  Science  Quarterly,  4,047  of  these  possessed  about 
seven-tenths  as  much  as  do  11,593,887  families.  Just  think  of 
it.  One  family  possessing  the  wealth  of  2,000  families  the 
country  over!  In  the  city  of  New  York  alone,  there  are  said 
to  be  five  men  whose  aggregated  wealth  exceeds  $500,000,000. 
How  many  hundred  millions  are  held  by  various  wealthy  cor- 
porations, coal  and  oil  syndicates  and  other  trusts,  I  am  unable 
to  state.  In  each  of  the  cities  of  New  York  and  Chicago  more 
than  100,000  men  and  women,  willing  to  work,  were  out  of  em- 
ployment last  winter,  many  of  whom  must  have  perished  from 
want,  but  for  charity's  aid.  These  conditions  another  winter 
promise  to  be  no  better. 

The  richest  corporations  and  persons  on  earth  are  probably 
in  the  United  States.  How  have  they  accumulated  their  vast 
fortunes?  Surely  not  by  their  own  industry  and  thrift,  but 
by  the  aid  of  statutes  regulating  the  rights  of  property, 
generally  statutes  providing  for  the  transmission  of  property 
by  descent  or  by  will,  or  the  creation  of  monopolies. 

It  is  only  by  virtue  of  statutory  law  that  man  is  permitted 
to  make  disposition  of  his  property  by  will,  and  it  is  only  by 
virtue  of  statutory  law  that  one  person  is  permitted  to  inherit 
property  from  another,  and  it  is  by  virtue  of  statute  law  that 
great  corporate  monopolies  have  been  built  up. 

No  man  has  a  natural  right  to  dispose  of  property  after 
death,  nor  has  one  person  a  natural  right  to  inherit  property 
from  another.  As  Blackstone  says:  "There  is  no  foundation 
in  nature  or  in  natural  law  why  the  son  should  have  the  right 
to  exclude  hii  feUow-creaturet  from  a  determinate  spot  of 


The  Lawt  of  Property.  101 

land  because  his  father  did  so  before  him,  or  why  the  occu- 
pier of  a  particular  field  or  of  a  jewel,  when  lying  on  his  death- 
bed, and  no  longer  able  to  maintain  possession,  should  be  able 
to  tell  the  rest  of  the  world  which  of  them  should  enjoy  it 
after  him." 

Under  Illinois  laws,  the  owner  of  real  estate  is  permitted  to 
lease  it  for  an  indefinite  period,  and  compel  future  generations 
who  occupy  the  premises  to  pay  rent  to  unborn  generations. 
Leases  for  ninety -nine  years  are  quite  common  in  Chicago.  It 
is  by  no  divine  law  that  the  occupant  of  land  to-day  is  allowed 
to  compel  its  occupant  one  hundred  years  hence  to  pay 
tribute  for  its  use.  The  statutes  of  Illinois  have  given  to  the 
owner  of  property  the  right  to  dispose  of  it  by  will,  not 
wholly,  but  to  a  certain  extent.  If  married,  neither  the 
husband  nor  wife  can  give  away  the  homestead  or  dower 
rights  of  the  other,  nor  can  creditors,  heirs  or  devisees  take 
Irom  the  widow  her  allowance. 

The  money  power  has  governed  legislation  in  all  civilized 
countries  for  generations.  It  matters  not  what  party  ia  in 
power  in  the  national  or  Stategovernments  of  our  own  country, 
the  money  power  has  exercised  a  controlling  influence  in 
many  instances  in  the  shaping  and  administration  of  our  laws. 

If  the  accumulation  of  vast  fortunes  goes  on  another 
generation  with  the  same  accelerated  rapidity  as  during  the 
present,  the  wealth  of  this  country  will  soon  be  consolidated 
in  the  hands  of  a  few  corporations  and  individuals  to  as  great 
an  extent  as  the  landed  interests  of  Great  Britain  now  are. 

What  is  the  remedy  for  this  state  of  things,  which,  if 
permitted  to  continue,  will  make  the  masses  of  the  people  de- 
pendent upon  the  generosity  of  the  few  for  the  means  to  live? 
So  far  as  concerns  corporations  of  a  public  or  quasi-public 
character — and  none  others  should  exist — the  remedy  is  simple. 
They  are  completely  under  the  control  of  the  legislatures, 
whence  they  derive  all  their  powers. 

It  is  entirely  competent  for  a  legislature  to  provide  the 
manner  in  which  the  business  of  a  corporation  shall  be  con- 
ducted. It  may  provide  that  the  directors  phall  consist  of  few 
or  many  persons,  that  a  portion  of  them  shall  be  taken  from 
the  employes  of  the  corporation,  selected  by  them,  another 
part  from  the  stockholders  who  furnish  the  capital  for  carry- 
ing on  its  business.  It  may  provide  that  the  employes  shall 
first  be  paid  from  the  revenues  of  the  company  a  certain  fixed 
sum,  graduated  according  to  the  character  of  the  work  per- 
formed by  each;  that  a  fair  rate  of  interest  shall  then  be  paid 
upon  the  capital  invested,  and  the  balance  be  distributed 
upon  some  equitable  principle  between  the  employes  and  the 
stockholders.  In  case  of  loss  the  stockholders  would  have  to 


102  The  Laws  of  Property. 

suffer,  since  the  employe,  having  a  right  to  live,  must  in  all 
cases  receive  his  daily  wages  when  dependent  upon  them  for 
subsistence.  This  principle  receives  judicial  sanction  from 
United  States  Circuit  Judge  Caldwell,  in  a  recent  order  en- 
tered in  case  of  the  Santa  Fe  Railroad,  as  follows : 

"Ordered  that  the  men  employed  by  the  receivers  in  the 
operation  of  the  road  and  the  conduct  of  its  business  shall  be 
paid  their  monthly  wages  not  later  than  the  15th  of  the 
month  following  their  accrual.  If  the  earnings  of  the  road 
are  not  sufficient  to  pay  the  wages  of  the  men  as  herein  di- 
rected, the  receivers  are  hereby  authorized  and  required  to 
borrow  from  time  to  time,  as  occasion  may  require,  a  sufficient 
sum  of  money  for  that  purpose.  The  obligations  of  the  re- 
ceivers for  money  borrowed  for  this  purpose  specified  in  this 
order  shall  constitute  a  lien  on  the  properly  of  the  trust  prior 
and  superior  to  all  liens  thereon." 

Under  the  powers  inherent  in  every  sovereignty,  government 
may  regulate  the  conduct  of  its  citizens  towardjeach  other,  and, 
when  necessary  for  the  public  good,  the  manner  in  which  each 
shall  use  his  own  property. 

Formerly,  corporations  having  special  privileges  were 
created  by  special  acts,  which  the  courts  construed  to  be  con- 
tracts between  the  granting  power  and  the  corporators,  which 
once  granted  could  not  be  repealed  or  varied  by  the  granting 
power.  This  granting  of  charters  to  favored  individuals,  con- 
ferring upon  them  privileges  not  possessed  by  the  general  pub- 
lic, became  obnoxious  to  public  sentiment,  and,  as  a  conse- 
quence, general  laws  have  been  passed  in  this  and  many  other 
States,  under  which  any  three  persons  may  become  incorpor- 
ated for  any  private  purpose.  This  has  become  a  worse  evil 
than  the  old  system  af  granting  special  charters.  Under  the 
general  law  enacted  in  this  State  twenty  years  ago,  I  am  in- 
formed, 27,200  corporations  have  been  created. 

Irresponsible  persons  are  often  induced,  for  a  small  consid- 
eration, to  form  corporations  with  a  proposed  capital  of  millions; 
to  subscribe  for  the  whole  stock  except  a  share  or  two,  and  for 
a  fancied,  imaginary  or  worthless  consideration,  to  issue  to 
themselves  fully  paid  up  stock,  which  is  subsequently  trans- 
ferred to  the  real  parties  in  interest,  who  expect  thereby  to 
escape  personal  liability  if  the  concern  is  a  failure,  and  to  pocket 
theprofits  if  a  success.  Business  of  all  sorts  is  now  to  a  great 
extent  carried  on  in  the  name  of  corporations,  in  order  that  the 
proprietors  may  escape  personal  responsibility.  How  can  the 
individual,  who  is  personally  responsible  for  his  contracts,  suc- 
cessfully compete  with  acorporation  run  by  persons  who  incur 
no  such  responsibility?  Doing  business  in  a  corporate  name 
not  only  paralyzes  individual  effort,  but  leads  to  a  concentra- 
tion of  capital — the  great  evil  of  our  time.  The  remedy  for  this 


The  Laws  of  Property.  103 

growing  state  of  things  would  be  to  restrict  the  formation  o^ 
corporations  to  such  as  are  formed  for  public  purposes,  or  such 
as  the  public  have  an  interest  in.  Seventy -eight  per  cent,  of 
the  great  fortunes  of  the  United  States  are  said  to  be  derived 
from  permanent  monopoly  privileges  which  ought  never  to  have 
been  granted. 

As  before  stated,  the  power  to  dispose  of  property  after 
death  by  will  is  conferred  by  statute,  under  certain  limita- 
tions. Why  should  this  privilege  be  given  to  dispose  of  more 
than  a  fixed  amount  of  property  to  any  one  individual,  say 
property  to  the  value  of  not  over  five  hundred  thousand  dol- 
lars to  the  wife,  of  not  more  than  one  hundred  thousand  dollars 
to  each  child,  and  of  not  more  than  fifty  thousand  dollars  to 
any  other  relative,  extending  to  the  third  or  fourth  degree,  and 
that  the  balance  of  the  estate  should  escheat  to  the  State,  to 
be  used  by  it  for  the  support  of  schools,  charitable  institutions, 
the  employment  of  laborers  in  making  roads,  and  other  good 
purposes? 

The  law  now  provides  for  the  escheat  of  estates  of  persons 
dying  without  heirs.  The  same  limitation  might  be  put  upon 
inheritances  where  there  is  no  will,  and  in  this  way  the  accum- 
ulation of  vast  estates  by  inheritance  or  devise  would  be 
checked,  and  property,  especially  landed  estates,  which  by  na- 
ture belong  to  all,  would  be  more  equally  distributed.  It  should 
not  be  forgotten  that  the  method  of  transmitting  property 
from  the  dead  to  the  living  is  entirely  derived  from  the  state. 
If  public  policy  requires  that  the  state  should  give  to  the  dying 
possessor,  no  longer  able  to  control  or  take  with  him  his  pos- 
sessions, the  privilege  of  disposing  of  so  much  as  may  be  con- 
ducive to  the  comfort  and  happiness  of  his  surviving  kindred, 
does  it  require  that  this  privilege  should  be  extended  to  his 
disposition  of  millions  to  the  injury  of  the  rest  of  mankind? 

If  it  be  said  that  to  limit  the  privilege  of  disposing  of  ex- 
ceeding a  million  dollars  of  property  by  devise  or  descent  would 
check  enterprise  and  industry,  as  no  man  would  struggle  to 
acquire  property  which  he  could  not  leave  to  his  surviving 
kindred,  my  reply  is,  that  man  by  his  own  thrift  and  industry 
is  seldom  able  to  acquire  more  than  a  million  dollars'  worth  of 
property.  Fortunes  exceeding  that  amount  are  usually  ac- 
quired by  speculation,  trickery,  or  some  device  by  which  one 
man  takes  advantage  of  his  fellow-man,  and  which,  if  not  ille- 
gal, is  immoral;  or  by  members  of  privileged  monopolies,  trusts 
and  syndicates, 

I  don't  mean  to  say  that  all  great  fortunes  exceeding  a  mil- 
lion have  been  acquired  by  immoral  means,  but  such  as  have  not 
are  the  exception,  and  to  limit  the  privilege  of  disposing  of  more 
than  a  million  by  devise  or  descent  would  not  affect  one  in  ten 


104  The  Laws  of  Property. 

thousand  of  the  people.  In  short,  such  limitations  would  tend 
to  discourage,  not  honest  enterprise  and  industry,  but  stock 
jobbing,  trickery  and  other  questionable  methods  of  acquiring 
vast  fortunes. 

We  have  already  abolished  primogeniture,  by  which  the 
eldest  son,  to  the  exclusion  of  all  other  children,  inherits  the 
entire  landed  estate  of  his  ancestor,  and  no  one  in  this  country 
at  this  day  would  think  of  restoring  that  right,  although  it 
still  obtains  in  England.  If  limitations  should  be  put  upon  the 
disposition  of  vast  estates  by  will  or  descent,  f  utui  e  generations 
would  doubtless  look  upon  our  present  laws,  which  allow  such 
estates  to  be  perpetuated  in  certain  families,  with  the  same 
disfavor  with  which  we  now  look  upon  the  laws  of  primogeni- 
ture. 

Evasions  of  laws  limiting  the  amount  of  property  to  be  de- 
vised or  inherited,  by  conveyances  during  life,  could  be  pro- 
hibited in  like  manner  as  conveyances  in  fraud  of  creditors  are 
now  prohibited. 

* 
God  Save  the   People! 

When  wilt  thou  save  thy  people? 

O  God  of  mercy!  when? 
Not  kings  and  lords,  but  nations; 

Not  thrones  and  crowns,  but  menl 
Flowers  of  thy  heart,  O  God,  are  they} 
Let  them  not  pass  like  weeds  away — 
Their  heritage  a  sunless  day. 
God  save  the  people! 

Shall  crime  bring  crime  forever, 

Strength  aiding  still  the  strong? 
Is  it  thy  will,  O  Father, 

That  man  shall  toil  for  wrong? 
"No!"  say  thy  mountains.  "No!"  thy  skies; 
Man's  clouded  sun  shall  brightly  rise 
And  songs  ascend  instead  of  sighs! 
God  save  the  people  1 

When  wilt  thou  save  the  people? 

O  God  of  mercy!  when? 
The  people,  Lord,  the  people! 

Not  thrones  and  crowns,  but  men! 
God,  save  the  people,  thine  they  are, 
Thy  children,  as  thy  angels  fair; 
Save  them  from  bondage  and  despair! 

God  save  the  people!      — Ebenezer  ElMott. 


|»  The  great  Napoleon  said,  after  studying  a  set  of  compound 
interest  tables :  "  There  is  one  thing  to  my  mind  more  won- 
derful  than  all  the  rest,  and  that  is,  that  the  deadly  fact 
buried  in  those  tables  has  not  before  this  devoured  the  whole 
•world" 


INTEREST  AND  USURY. 

-^ 

HpHE  ethical  sense  of  mankind  saw  at  an  early  day  the  wrong 
*•  of  usury.  The  Mosaic  law  was  very  explicit  on  the  sub- 
ject. Cicero  mentions  that  Cato.be ing  asked  what  he  thought 
of  usury,  made  no  other  answer  to  the  question  than  by  asking 
the  person  who  spoke  to  him  what  he  thought  of  murder. 
The  Christian  Church,  in  its  early  days  and  until  the 
end  of  the  Middle  Ages,  utterly  forbade  the  exaction  of  inter- 
est. In  the  reign  of  Edward  VI.  a  prohibitory  act  was  passed, 
for  the  stated  reason  that  the  charging  of  interest  was  lia  vice 
most  odious  and  detestable  and  contrary  to  the  word  of  God." 
It  was  not  until  the  time  of  the  Reformation  that  this  inter- 
pretation of  the  divine  law  was  ever  questioned.  Calvin  was 
one  of  the  first  to  contend  that  the  sentiment  against  exact- 
ing interest  arose  from  a  mistaken  view  of  the  Mosaic  law.  A 
series  of  enactments,  known  as  the  Usury  Laws,  restricted  the 
maximum  rate  to  be  charged  in  England.  By  Act  21  James 
I.,  this  rate  was  fixed  at  8  per  cent.  During  the  Common- 
wealth this  rate  was  reduced  to  6  per  cent.,  and  by  Act  12 
Anne  to  5  per  cent.,  at  which  rate  it  stood  until  1839.  In  the 
United  States  the  legal  rate  of  interest  varies,  nearly  all  the 
States  having  passed  statutes  fixing  a  maximum  rate. 
"It  is  against  nature  for  money  to  breed  money." 
"Usury  bringeth  the  treasures  of  a  realm  or  state  into  a 
few  hands;  for  the  usurer  being  at  certainties,  and  others  at 
uncertainties,  at  the  end  of  the  game  most  of  the  money  will 
be  in  the  box;  and  ever  a  state  fiourisheth  when  wealth  is  more 
equally  spread." 

These  quotations  are  from  the  essay  Of  Usury,  by  that 
wisest  of  philosophers,  Francis  Bacon.  The  reader  must  bear 
in  mind  that  while  nowadays  the  term  "usury"  is  applied  gen- 

106 


106  Interest  and  Usury. 

erally  only  to  excessive  interest,  in  Bacon's  time  the  word  was 
used  for  any  rate  of  premium  or  interest  for  the  use  of  money. 
The  word  usance,  now  obsolete  in  that  sense,  conveyed  the 
same  meaning,  and  is  used  in  Shakespeare's  "Merchant  of 
Venice."  The  provocation  which  Antonio  first  gave  Shylock 
was  that — 

"He  lends  out  money  gratis  and  brings  down 
The  rate  of  usance  here  with  us  in  Venice." 

All  are  familiar  with  the  conditions  which  Shylock  ex- 
acted of  Antonio: 

Shylock.  This  kindness  will  I  show. 

Go  with  me  to  a  notary,  seal  me  there 

Your  single  bond;  and,  in  a  merry  sport, 

If  you  repay  me  not  on  such  a  day, 

In  such  a  place,  such  sum  or  sums  as  are 

Expressed  in  the  condition,  let  the  forfeit 

Be  nominated  for  an  equal  pound 

Of  your  fair  flesh,  to  be  cut  off  and  taken 

In  what  part  of  your  body  pleaseth  me. 

Antonio.    Content,  i' faith:    I'll  seal  to  such  a  bond 
And  say  there  is  much  kindness  in  the  Jew. 

Bassanlo.    You  shall  not  seal  to  such  a  bond  for  me: 
I'll  rather  dwell  in  my  necessity. 

Antonio.    Why,  fear  not,  man;  I  will  not  forfeit  it; 

Within  these  two  months,  that's  a  month  before 

This  bond  expires,  I  do  expect  return 

Of  thrice  three  times  the  value  of  this  bond.  .  .  . 

Come  on;  in  this  there  can  be  no  dismay; 

My  ships  come  home  a  month  before  the  day. 

But  Antonio's  ships  did  not  come  in — just  as  the  farmer's 
crop  often  fails  and  the  artisan's  employment  gives  out  just 
When  the  mortgage  is  due — and  Shylock  claimed  his  pound  of 
flesh.  "The  Merchant  of  Venice"  is  a  comedy,  and  Shylock, 
Bassanio  and  Antonio  are  mere  creatures  of  imagination;  but 
there  are  thousands  of  tragedies  enacted  every  day  in  real  life 
in  which  real  Shylocks  play  a  part.  The  Shylocks  of  to-day 
are  quite  unlike  the  Shylock  of  fiction,  however.  Banker 
Morgan,  who  negotiated  with  Grover  Cleveland  the  star-cham- 
ber bond  deal  by  which  the  American  government  sold  to  the 


Interest  and  Usui*y.  107 

Rothschilds  at  a  premium  of  only  ±%  per  cent.  $100,000,000  of 
interest-bearing  gold  bonds  which  were  immediately  after 
quoted  at  a  premium  of  21  per  cent.,  is  a  philanthropist.  As 
soon  as  possible  after  the  deal  was  made  his  portrait  appeared 
in  many  of  the  great  dailies  with  a  fulsome  account  of  his 
many  charities!  It  will  take  many  a  pound  of  human  flesh, 
many  a  drop  of  life's  blood,  to  pay  the  interest  on  the  bonds 
which  he  negotiated,  and  out  of  the  sale  of  which  he  made  a 
cool  million  in  one  day. 

The  Bible  has  much  to  say  on  the  subject  of  usury.  The 
writer  has  never  heard  a  sermon  preached  on  any  of  the  fol- 
lowing texts,  perhaps  because  bankers  and  money-lenders  rent 
the  best  pews.  Remember  that  usury  here  means  simply  in- 
terest— not  excessive  interest: 

Exodus  22:25: — "If  thou  lend  money  to  any  of  my  people 
that  is  poor  by  thee,  thou  shalt  not  be  to  him  as  an  usurer, 
neither  shalt  thou  lay  upon  him  usury." 

Deuteronomy  23: 19-20: — "Thou  shalt  not  lend  upon  usury 
to  thy  brother;  usury  of  money,  usury  of  victuals,  usury  of 
anything  that  is  lent  upon  usury.  Unto  a  stranger  thou 
mayest  lend  upon  usury,  but  unto  thy  brother  thou  shalt  not 
lend  upon  usury,  that  the  Lord  thy  God  may  bless  thee." 

Nehemiah  5:7: — "Then  I  consulted  with  myself,  and  I  re- 
buked the  nobles,  and  the  rulers,  and  said  unto  them:  Ye  ex- 
act usury  every  one  of  his  brother.  And  I  set  a  great  assem- 
bly against  them." 

Psalms  15:5: — David  describes  a  citizen  of  Zion:  "He 
that  putteth  not  out  his  money  to  usury,  nor  taketh  reward 
against  the  innocent." 

A  Chapter  from  "Caesar's  Column." 

I  cannot  do  better  here  than  quote  a  significant  chapter 
from  Ignatius  Donnelly's  powerful  novel  "Caesars  Column," 
which  certainly  did  as  much  as  any  book  ever  printed  to  set 
people  thinking: 

"But  what  would  you  do,  my  good  Gabriel,"  said  Maxi- 
milian, smiling,  "if  the  reformation  of  the  world  were  placed  in 
your  hands?  Every  man  has  a  Utopia  in  bis  head.  Give  me 
some  idea  of  yours." 


108  Interest  and  Usury. 

"First,"  I  said,  "I  should  do  away  with  all  interest  on 
money.  Interest  on  money  is  the  root  and  ground  of  the 
world's  troubles.  It  puts  one  man  in,  a  position  of  safety, 
while  another  is  in  a  condition  of  insecurity,  and  thereby  it  at 
once  creates  a  radical  distinction  in  human  society." 

"How  do  you  make  that  out?"  he  asked. 

"The  lender  takes  a  mortgage  on  the  borrower's  land,  or 
house,  or  goods,  for,  we  will  say,  one-half  or  one-third  their 
value;  the  borrower  then  assumes  all  the  chances  of  life  to  re- 
pay the  loan.  If  he  is  a  farmer,  he  has  to  run  the  risk  of  the 
fickle  elements.  Rains  may  drown,  droughts  may  burn  up  his 
crops.  If  a  merchant,  he  encounters  all  the  hazards  of  trade; 
the  bankruptcy  of  other  tradesmen;  the  hostility  of  the  ele- 
ments sweeping  away  agriculture,  and  so  affecting  commerce; 
the  tempests  that  smite  his  ships,  etc.  If  a  mechanic,  he  is 
still  more  dependent  upon  the  success  of  all  above  him  and 
the  mutations  of  commercial  prosperity.  He  may  lose  employ- 
ment; he  may  sicken;  he  may  die.  But  behind  all  these  risks 
stands  the  money-lender,  in  perfect  security.  The  failure  of 
his  customers  only  enriches  him;  for  he  takes  for  his  loan  prop- 
erty worth  twice  or  thrice  the  sum  he  has  advanced  upon  it. 
Given  a  million  of  men  and  a  hundred  years  of  time,  and  the 
slightest  advantage  possessed  by  any  one  class  among  the  mil- 
lion must  result,  in  the  long  run,  in  the  most  startling  dis- 
crepancies of  condition.  A  little  evil  grows  like  a  ferment— it 
never  ceases  to  operate;  it  is  always  at  work.  Suppose  I  bring 
before  you  a  handsome,  rosy-cheeked  young  man,  full  of  life 
and  hope  and  health.  I  touch  his  lip  with  a  single  bacillus  of 
pt hisis  pulmonalfs — consumption.  It  is  invisible  to  the  eye; 
it  is  too  small  to  be  weighed.  Judged  by  all  the  tests  of  the 
senses,  it  is  too  insignificant  to  be  thought  of;  but  it  has  the 
capacity  to  multiply  itself  indefinitely.  The  youth  goes  off 
singing.  Months,  perhaps  years,  pass  before  the  deadly  disor- 
der begins  to  manifest  itself,  but  in  time  the  step  loses  its  elas- 
ticity; the  eyes  become  dull;  the  roses  fade  from  the  cheeks; 
the  strength  departs,  and  eventually  the  joyous  youth  is  but 
a  shell — a  cadaverous,  shrunken  form,  inclosing  a  shocking 
mass  of  putridity;  and  death  ends  the  dreadful  scene.  Give 
one  set  of  men  in  a  community  a  financial  advantage  over  the 
rest,  however  slight— it  may  be  almost  invisible— and  at  the 
end  of  centuries  that  class  so  favored  will  own  everything  and 
wreck  the  country.  A  penny,  they  say,  put  out  at  interest  the 
day  Columbus  sailed  from  Spain,  and  compounded  ever 
since,  would  amoui.t  now  [A.  D.  1990]  to  more  than  all  the  as- 
sessed value  of  all  the  property,  real,  personal  and  mixed,  on 
the  two  continents  of  North  and  South  America." 

"But,"  said  Maximilian,  "how  would  the  men  get  along 
who  wanted  to  borrow?" 


Interest  and  Usury.  109 

-The  necessity  to  borrow  is  one  of  the  results  of  borrow- 
ing. The  disease  produces  the  symptoms.  The  men  who  are 
enriched  by  borrowing  are  infinitely  less  in  number  than  those 
who  are  ruined  by  it;  and  every  disaster  to  the  middle  class 
swells  the  number  and  decreases  the  opportunities  of  the  help- 
less poor.  Money  in  itself  is  valueless.  It  becomes  valuable 
only  by  use — by  exchange  for  things  needful  for  life  or  com- 
fort. If  money  could  not  be  loaned  it  would  have  to  be  put 
out  by  the  owner  of  it  in  business  enterprises,  which  would 
employ  labor;  and  as  the  enterprise  would  not  then  have  to 
support  a  double  burden — to-wit,  the  man  engaged  in  it  and 
the  usurer  who  sits  securely  upon  his  back — but  would  have 
to  support  only  the  former  usurer,  that  is,  the  present  em- 
ployer— its  success  would  be  more  certain;  the  general  pros- 
perity of  the  community  would  be  increased  thereby,  and  there 
would  be,  therefore,  more  enterprises,  more  demand  for  labor, 
and  consequently  higher  wages.  Usury  kills  off  the  enterpris- 
ing members  of  a  community  by  bankrupting  them,  and  leaves 
only  the  very  rich  and  the  very  poor;  but  every  dollar  the 
employers  of  labor  pay  to  the  lenders  of  money  has  to  come 
eventually  out  of  the  pockets  of  the  laborers.  Usury  is  there- 
fore the  cause  of  the  first  aristocracy,  and  out  of  this  grow  all 
the  other  aristocracies.  Inquire  where  the  money  came  from 
that  now  oppresses  mankind,  in  the  shape  of  great  corpora- 
tions, combinations,  etc.,  and  in  nine  cases  out  of  ten  you  will 
trace  it  back  to  the  fountain  of  interest  on  money  loaned.  The 
coral  island  is  built  up  of  the  bodies  of  dead  coral  insects; 
large  fortunes  are  usually  the  accumulations  of  wreckage,  and 
every  dollar  represents  disaster." 

How  Wealth  Accumulates. 

As  proof  of  the  fact  that  it  is  a  mighty  fortunate  thing  for 
humanity  that  the  Rothschilds  did  not  conduct  a  bank  in  the 
year  1  A.  D.,  I  reprint  from  the  Twentieth  Century  the  follow- 
ing article  by  H.  C.  Whitaker,  which  shows  the  beauties  of  in- 
terest-drawing: 

"Had  one  cent  been  loaned  on  the  14th  day  of  March, 
A.  D.  1,  interest  being  allowed  at  the  rate  of  6  per  cent.,  com- 
pounded yearly,  then  1894  years  later— that  is,  on  March  14, 
1895— the  amount  due  would  be  §3,497,840,000,000,000,000,000,- 
000,000,000,000,000,000,000,000  (8,497,840,000  decillions).  If  it 
were  desired  to  pay  this  in  gold,  23.2  grains  to  the  dollar,  then, 
taking  spheres  of  pure  gold,  each  the  size  of  the  earth,  it 
would  take  610,070,000,000,000,000  of  them  to  pay  for  that  cent. 
Placing  these  spheres  in  a  straight  row,  their  combined  length 


110  Interest  and  Usury. 

would  be  4,820,870,000,000,000,000,000  miles,  a  distance  which 
it  would  take  light  (going  at  the  rate  of  186,330  miles  per  sec- 
ond) 820,890,000  years  to  travel. 

"The  planets  and  stars  of  the  entire  solar  and  stellar  uni- 
verse, as  seen  by  the  great  Lick  telescope,  if  they  were  all  of 
solid  gold,  would  not  nearly  pay  the  amount.  A  single  sphere 
to  pay  the  whole  amount,  if  placed  with  its  center  at  the  sun, 
would  have  its  surface  extending  563,580,000  miles  beyond  the 
orbit  of  the  planet  Neptuue,  the  farthest  in  our  system. 

"It  may  be  added  that  if  the  earth  had  contained  a  popu- 
lation of  ten  billions,  each  one  making  a  million  dollars  a  sec- 
ond, then  to  pay  for  that  cent  it  would  have  required  their 
combined  earnings  for  26,938,500,000,000,000,000,000  years." 


"  THE  young  lambs  are  bleating  in  the  meadows, 

The  young  birds  are  chirping  in  their  nest, 
The  young  fawns  are  playing  with  the  shadows, 

The  young  flowers  are  blowing  toward  the  west — 
But  the  young,  young  children,  oh,  my  brothers, 

They  are  weeping  bitterly  ! 
They  are  weeping  in  the  playtime  of  the  others, 

In  the  country  of  the  free  ! "  — Mrs.  Browning. 


BANKS  were  unknown  in  Virginia  until  1804,  yet  no  people 
enjoyed  more  happiness  or  prosperity.  See  the  official 
report  of  James  Guthrie,  Secretary  of  the  Treasury,  June 
30,  1855. 


"  A  WEAPON  that  comes  down  as  still 

As  snowflakes  fall  upon  the  sod, 
But  executes  a  freeman's  will 

As  lightning  does  the  will  of  God; 
And  from  its  force  nor  doors  nor  locks 
Can  shield  you;  —  'tis  the  ballot-box."  —  Pierpont. 


WHAT  stronger  breast-plate  than  a  heart  untainted  ? 
Thrice  is  he  armed  that  hath  his  quarrel  just; 
And  he  but  naked,  though  locked  up  in  steel, 
Whose  conscience  with  injustice  is  corrupted." 

— Shakespeare. 


!»  "And  yc  shall  hallow  the  fiftieth  year,  and  proclaim  liberty 
throughout  the  land  unto  all  the  inhabitants  thereof" — Levit- 
icus 25:10. 


DEBT  AND  SLAVERY. 

*%• 

"Debt  is  the  fatal  disease  of  republics,  the  first  thing  and 
the  mightiest  to  undermine  government  and  corrupt  the  peo- 
ple."—WENDELL,  PHILLIPS. 

CROM  the  earliest  dawn  of  history  debt  has  ever  borne  a 
*•  close  relationship  to  slavery  and  servitude.  "It  is  worthy 
of  remark,"  Bays  Grote  (History  of  Greece,  vol.  iii.,  p.  144), 
"that  the  first  borrowers  must  have  been  for  the  most  part 
driven  to  this  necessity  by  the  pressure  of  want,  and  contract- 
ing debt  as  a  desperate  resource  without  any  fair  prospect  of 
ability  to  pay;  debt  and  famine  run  together  in  the  mind  of 
the  poet  Hesiod.  The  borrower  is  in  this  unhappy  state  rather 
a  distressed  man  soliciting  aid  than  a  solvent  man  capable  of 
making  and  fulfilling  a  contract;  and  if  he  cannot  find  a  friend 
to  make  a  free  gift  to  him  in  the  former  character  he  would 
not  under  the  latter  character  obtain  a  loan  from  a  stranger 
except  by  the  promise  of  exorbitant  interest  and  by  the  fullest 
eventual  power  over  his  person  which  he  is  in  a  position  to 
grant." 

'•This  remark,"  says  Prof.  Nicholson  in  the  Encyclopedia 
Britannica,  "suggested  by  the  state  of  society  in  ancient 
Greece,  is  largely  applicable  throughout  the  world  until  the 
close  of  the  early  Middle  Ages."  The  conditions  of  ancient 
usury  find  a  graphic  illustration  in  the  account  of  the  building 
of  the  second  temple  at  Jerusalem  (Nehemiah  5: 1-12).  Some 
said:  "We  have  mortgaged  our  lands,  vineyards  and  houses 
that  we  might  buy  corn,  because  of  the  dearth."  Others  said: 
"We  have  borrowed  money  for  the  king's  tribute,  and  that 
upon  our  lands  and  vineyards,  .  .  .  and  lo,  we  bring  into  bond- 
age our  sons  and  our  daughters  to  be  servants,  .  .  .  neither  is 
it  in  our  power  to  redeem  them,  for  other  men  have  our  lands 
and  vineyards." 

Ill 


112  Debt  and  Slavery. 

In  ancient  Greece  we  find  a  law  of  bankruptcy  resting  on 
slavery.  In  Athens,  about  the  time  of  Solon's  legislation 
(594  B.  C.),  the  bulk  of  the  population  who  had  originally  been 
small  proprietors  became  gradually  indebted  to  the  rich  to 
such  an  extent  that  they  were  practically  slaves;  those  who 
nominally  owned  their  property  owed  more  than  they  could 
pay,  and  stone  pillars  erected  on  their  land  showed  the  amount 
of  the  debts  and  the  names  of  the  lenders.  Solon's  remedy  for 
this  state  of  affairs  was  to  cancel  all  debts  made  on  the  security 
of  the  land  or  the  person  of  the  debtor,  and  at  the  same  time 
he  enacted  that  henceforth  no  loans  could  be  made  on  the 
bodily  security  of  the  debtor,  and  the  creditor  was  confined 
to  a  share  of  the  property. 

In  Rome's  early  history  practically  the  same  conditions 
prevailed  as  in  Greece.  About  500  B.  C.  an  attempt  was  made 
to  remedy  the  evil  by  providing  a  maximum  rate  of  interest, 
no  alteration  being  made,  however,  in  the  law  of  debt.  In  the 
course  of  a  few  centuries  the  free  farmers  were  utterly  de- 
stroyed. The  pressure  of  war  and  taxes  and  usury  drove  all 
into  debt  and  into  practical,  if  not  technical,  slavery.  The  old 
law  of  debt  was  not  really  abolished  until  the  dictatorship  of 
Julius  Caesar,  who  than  practically  adopted  Solon's  legislation 
of  more  than  five  centuries  before,  butoo  late  to  save  lie 
middle  class. 

In  the  course  of  centuries  and  the  evolution  of  civiliza- 
tion chattel  slavery  has  been  abolished;  but  the  slavery  of  debt 
still  remains,  and  usury  is  now,  as  it  was  in  all  the  history  of 
mankind,  the  tool  with  which  debt  forges  the  chains  of  na- 
tions. It  is  not  the  province  of  this  work  to  examine  into  the 
conditions  of  other  countries  than  our  own,  but  the  facts  now 
to  be  presented  will  convince  the  thoughtful  reader  that  the 
American  people  are  bound  by  chains  of  debt  which  it  will 
require  the  wisest  statesmanship  to  break. 

Representative  Warner  of  Massachusetts  (Republican),  in  a 
speech  delivered  in  Congress  in  1894,  stated  that  the  in- 
terest-bearing debts  of  the  United  States,  public  and  private, 
aggregated  a  grand  total  of  832,000,000,000  (thirty-two  billions 
of  dollars).  This  would  be  bad  enough,  but  careful  estimates 


Debt  and  Slavery. 


118 


by  conservative  students  of  political  economy  show  that  the 
amount  is  very  much  larger. 

Col.  W.  H.  Harvey,  author  of  "Coin's  Financial  School,"  a 
book  which  has  probably  had  more  readers  than  any  work  on 
political  economy  ever  printed  in  the  world,  makes  the  follow- 
ing itemized  estimate  of  the  interest-bearing  debts  of  this 
country,  public  and  private.  Most  of  the  figures  are  derived 
from  recognized  official  sources: 

The  national  debt,  according  to  the  official 

census  o?  1890,  was $  891,960,104 

State  and  municipal  debts  (census  1890) 1,135,210,442 

Railroad  bonds,  1892  (Poor's  Manual,  1893) ....        5,463,611,204 

Debt  on  farms  and  homes  occupied  by  owner 
(R.  R.  Porter,  Sup't.  Eleventh  Census,  in 
North  American  Review,  vol.  153,  p.  618)  2,500,000,000 

Mortgaged  indebtedness  of  business  realty, 
street  railways  manufactories  and  busi- 
ness enterprises,  (estimated  from  partial 
reports  of  llth  census) 5,000,000,000 

Loans  from  8,773  national  banks  (Statistical 

Abstracts  of  the  United  States) 2,153,769,806 

Loans  from  5,579  State  savings,  stock  and  pri- 
vate banks  and  trust  companies  (Statisti- 
cal Abstracts  of  the  United  States) 2,201,764,292 

These  are  figures  on  which  something  definite 
has  been  obtained;  also  the  ratio  of  in- 
crease from  1880  to  1890,  which  was  from 
86.750,000,000  in  1880  to  819,000,000,000  in 
1890.  By  computing  the  same  ratio  of 
increase  we  should  now  add 8,000,000,000 

Mortgage  debts  on  homes  not  occupied  by 

owner  (estimated) 1,000,000,000 

Overdue  accounts  due  merchants,  wholesale 
and  retail,  drawing  from  6  to  10  per  cent, 
interest  (estimated) 5,000,000,000 

Debts  due  pawn-brokers,  drawingfrom  60  to 
120  per  cent,  per  annum  or  5  to  10  per 
cent  a  month  (estimated) 1,000,000,000 

Private  debts  due  from  individuals  to  indi- 
viduals and  of  which  there  is  no  public 
record  or  other  data  for  census  officers  to 
obtain  information  (estimated) 1,000.000,000 

Maritime  debts  (estimated) 1,000,000,000 

Overdrafts,   judgments,   overdue   taxes   and 


114  Debt  and  Slavery. 

miscellaneous  items  not  included  in  the 

foregoing  (estimated) 4,000,000,000 


Horrible  total $  40,346,315,848 

In  commenting  on  his  figures  Col.  Harvey  says  :  "Debts, 
a  non-producing  industry,  growing  to  such  a  magnitude  that 
the  profits  derived  from  all  the  producing  industries  of 
the  country  will  not  more  than  pay  the  interest  on  these  debts, 
make  the  producers  thereafter  work  for  the  benefit  of  the 
money-lender  or  non-producing  class.  When  such  a  condition 
as  to  debts  arises  as  we  now  have,  all  money  nearly  gravitates 
into  the  hands  of  the  money-lenders  and  piles  up  in  the  mouey 
centers.  The  effect  of  debts  upon  civilization  has  never  been 
understood  generally.  A  prosperous  country  can  carry  about 
a  certain  proportion  of  debt  among  its  people  without  ap- 
parent injury,  but  when  it  reaches  the  present  proportion— a 
proportion  only  reached  three  times  before  in  the  known 
history  of  the  world — it  produces  commercial  paralysis  and 
the  financial  enslavement  of  the  people.  All  the  people  make 
goes  to  pay  the  money-lenders  their  interest. 

"When  you  pay  money  to  a  merchant  or  a  manufacturer 
that  you  may  owe,  the  money  you  pay  him  is  paid  by  him  to 
others  for  material  and  other  products  of  his  business,  with  no 
charge  or  embargo  upon  it,  but  when  you  pay  back  to  a  money- 
lender a  debt  you  owe  him,  the  money  stops  there  until  it  is 
loaned  out  again  to  come  back  with  interest.  When  this 
grows  to  such  an  extent  as  to  require  all  or  most  of  the  money 
in  the  country  to  pay  the  interest  on  debts,  then  commerce 
slackens  and  there  is  little  or  no  money  among  the  people  ex- 
cept as  loaned  out  by  the  banks  and  others  whose  business 
it  is  to  loan  money.  They  are  dealing  in  the  blood  of  com- 
merce, and  when  they  take  it  from  the  arteries  of  commerce 
there  is  commercial  sickness  and  distress." 

The  abstract  of  the  Eleventh  Census  (p.  189)  gives  the  true 
valuation  of  all  real  and  personal  property  in  the  United 
States  as  only  $65,037,091,198.  Against  this  we  have  an  in- 
terest-bearing debt  of  forty  billions. 


Debt  and  Slavery.  115 

But  Col.  Harvey's  figures  are  by  no  means  complete.  He 
says  nothing  about  the  capital  stock  of  the  great  railroad, 
telegraph,  telephone,  insurance  and  other  corporations,  most 
of  which  is  "water."  The  reader  may  say  that  this  is  not 
debt.  But  it  is  debt,  as  it  represents  what  the  companies  owe 
to  their  stockholders;  it  draws  interest;  it  must  pay  salaries 
and  dividends.  To  say  that  we  pay  interest  every  year  on 
forty-five  billions  is  a  very  conservative  statement.  And  the 
debt  is  constantly  increasing,  for  the  reason  that  there  is  not 
in  circulation,  of  all  kinds  of  money,  enough  to  pay  this  in- 
terest. Let  us  figure  it  out.  The  average  rate  of  interest  is 
6%  per  cent.  Let  us  say  6  per  cent.  At  this  rate  we  pay 
each  year  82,700,000,000—  over  $40  per  capita.  Think  of  it  ! 
Forty  dollars  interest  for  every  man,  woman  and  child  !  Two 
hundred  dollars  for  every  family  !  and  this  exclusive  of  taxa- 
tion, which  adds  still  more  to  the  burden  of  life.  The  most 
blatant  gold-bug  does  not  claim  that  there  is  $40  of  money 
per  capita  in  circulation.  There  can  be  only  one  result—  and 
that  result  is  slavery,  abject,  hopeless  slavery  —  slavery  under 
the  guise  of  freedom,  but  still  slavery  —  unless  this  burden  of 
debt  is  thrown  off  before  the  patient  people  succumb  entirely. 

The  all-absorbing  scheme  of  the  American  oligarchy  to- 
day is  the  increase  of  the  war  power  of  the  nation.  (It 
now  costs  $52,712,014  a  year  to  maintain  it,  without  count- 
ing cost  of  construction  ,  $6,831,803  a  year.  See  page  204,  ab- 
stract of  Eleventh  Census.) 

If  we  look  at  the  enormous  interest-bearing  debt  that 
has  been  imposed  upon  the  people  of  this  country  (almost  en- 
tirely under  Republican  rule),  we  need  not  wonder  why  it  is 
necessary  to  strengthen  the  war  footing.  George  Washington 
said:  "Beware  of  a  government  bolstered  up  with  bayonets  I" 
Without  bayonets  the  American  government  of  to-day  would 
fail. 


"  FIRST  Freedom  and  then  Glory.     When  that  fails, 
Wealth,  vice,  corruption;  —  despotism  at  last. 
And  History,  with  all  her  volumes  vast, 
Hath  but  one  page."  —  Byron. 


)»  "  When  the  'sacredness  of  property '  is  talked  of,  it  should 
be  remembered  that  any  such  sacredness  does  not  belong  to 
landed  property.  No  titan  made  the  land.  It  is  the  original 
inheritance  of  the  whole  'species.  *****  When  private 
property  in  land  is  not  expedient  it  is  unjust" 

—JOHN  STUART  MILL. 


THE  LAND  QUESTION. 

•*• 

"The  land,  including  all  the  natural  resources  of  wealth,  is 
the  heritage  of  the  people,  and  should  not  be  monopolized  for 
speculative  purposes." 

GAERETT  SMITH,  the  famous  abolitionist,  said,  in  1856: 
"Land  reform  is  the  greatest  of  all  anti-slavery  measures. 
Abolish  slavery  tomorrow,  and  the  land  monopoly  would  pave 
the  way  for  its  re-establishment.  But  abolish  land  monopoly, 
make  every  American  citizen  owner  of  a  farm  adequate  to  his 
necessity,  and  there  will  be  no  room  for  the  return  of  slavery." 

History  proves,  if  it  proves  anything,  that  no  government 
can  survive  when  the  land  has  passed  from  the  ownership  of 
the  people.  France  went  into  the  revolution  when  twelve  per 
cent,  of  her  population  owned  all  the  kingdom.  In  our  coun- 
try to-day  the  land  is  passing  from  the  farmers  at  the  rate  of 
one  per  cent,  a  year;  mortgages  and  foreclosures  of  mortgages 
are  steadily  increasing  in  numbers — the  home-owners  and 
farm-owners  are  rapidly  disappearing  and  renters  and  tenants 
are  taking  their  places.  It  would  be  useless  to  pile  up  author- 
ities or  statistics  in  proof  of  this  assertion— the  facts  are  self- 
evident. 

When  France  went  into  the  revolution  it  was  her  own  aris- 
tocracy that  monopolized  the  land.  In  our  country,  the  ten- 
dency is  even  worse,  for  our  land,  the  storehouse  from  which 
nearly  all  our  wealth  is  drawn,  is  gradually  passing  into  the 
hands  of  alien  landlords  and  of  soulless  corporations  much  of 
whose  capital  stock  is  owned  abroad.  The  grants  to  railroads 
in  the  United  States  amount  to  325,000  square  miles,  an  area 
almost  equal  to  the  area  of  the  thirteen  original  States. 

116 


The  Land  Question.  117 

That  British  aristocrats  should  rule  large  domains  in  the 
United  States  is  at  first  a  difficult  thing  to  grasp.  Not  until 
it  is  borne  in  mind  that  peers  and  peeresses  of  Great  Britain 
are  large  landed  proprietors  in  our  country — Viscount  Scully 
alone  owns  3,000,000  acres  in  Illinois,  Iowa  and  Nebraska— does 
the  significance  of  absentee  landlordism  become  apparent. 

The  greatest  of  the  Eoglish  holdings  and  the  persons  in- 
terested are  thus  given  by  the  Chicago  Record: 

The  Texas  Land  Union  (syndicate  No.  3),  3,000,000  acres. 
Interested  peers:  Baroness  Burdett-Coutte,  Earl  Cadogan, 
H.  C.  Fitzroy  Somerset  (this  is  the  Duke  of  Beaufort),  William 
Alexander  Lochiel  Stephen  Douglas-Hamilton,  Duke  of  Beau- 
don;  the  Duke  of  Rutland;  Ughtaed  J.  Kay-Shuttleworth  and 
Ethel  Cadogan,  maid-in-waiting  to  the  Queen.  This  syndi- 
cate owns  whole  counties  in  Texas,  and  tens  of  thousands  of 
persons  pay  it  rentals. 

Sir  Edward  Reid— 2,000.000  acres  in  Florida.  This  is  a 
syndicate  which  includes  the  present  Duchess  of  Marlborough, 
Lady  Randolph  Churchill  and  Lady  Lister-Kaye. 

Viscount  Scully — 3,000,000  acres.  His  lordship  maintains 
an  elaborate  system  of  bailiffs. 

Syndicate  No.  4 — 1,800,000  acres  in  Mississippi.  This  syn- 
dicate includes  the  Marquis  of  Dalhousie,  George  Henry 
Howard  Cholmondeley  (Viscount  Cholmondeley),  Georgiana, 
Viscountess  Cross,  the  Hon.  Lady  Hamilton  Gordon  and  the 
Hon.  Lady  Biddulph. 

Marquis  of  Tweeddale — 1,750,000  acres.  The  Marquis  is 
William  Montagu  Hay,  famed  all  over  Scotland  as  the  rack- 
rent  landlord. 

Phillips,  Marshall  &  Co.,  London— 1,300,000  acres.  This 
firm  has  the  whole  peerage  for  its  clients. 

The  Anglo-American  Syndicate,  London— 750,000  acres. 
The  funds  of  widowed  peeresses  are  largely  invested  here.  The 
lands  are  in  the  South  and  West. 

Bryan  H.  Evans,  London— 700.000  acres  in  Mississippi. 

The  Duke  of  Sutherland— 125,000  acres.  This  is  the 
actress-loving,  champagne-bibbing  and  rack-rent  nobleman  of 
police-court  fame. 


118  The  Land  Question. 

The  British  Land  Company— 320,COO  acres,  in  Kansas. 

William  Whalley— 310,000  acres. 

The  Missouri  Land  Company — 300,000  acres.  This  oper- 
ates a  Missouri  domain  and  has  headquarters  at  Edinburgh. 
Robert  Tennant,  London— 230,000  acres.  This  is  all  farming 
land. 

Dundee  Land  Company— 247,000  acres. 

Lord  Dunmore — 120,000  acres. 

Benjamin  Newgas,  Liverpool — 100,000  acres. 

Lord  Houghton  (in  Florida)  —60,000  acres. 

Lord  Dunraven  (in  Colorado) — 60,000  acres. 

English  Land  Company  (in  Arkansas) — 50,000  acres. 

English  Land  Company  (in  California) — 50,000  acres. 

Alexander  Grant,  London — 35,000  acres  in  Kansas. 

Syndicate  No.  6—110,000  acres  in  Wisconsin.  This  syndi- 
cate includes  the  Earl  of  Verulam  and  the  Earl  of  Lankeville. 

M.  Elfenhauser,  of  Halifax— 600,000  acres  in  West  Vir- 
ginia. 

Syndicate  No.  1 — 50,000  acres  in  Florida.  This  is  a  Scotch 
concern. 

Nearly  20,000  000  acres  of  American  land  are  owned  by 
landlords  in  England  and  Scotland,  and  the  Record  omits  en- 
tirely the  Arkansas  Valley  Company,  in  Colorado,  whose  in- 
closures  embrace  over  a  million  acres  alone;  the  Prairie  Cattle 
Company  (Scotch),  another  million,  and  dozens  of  other  syn- 
dicates which  will  easily  bring  the  total  up  to  30,000,000  acres. 
There  is  also  a  Dutch  syndicate  which  owns  5,000,000  acres  of 
grazing  land  in  Western  States,  and  a  German  syndicate,  own- 
ing 2,000,000  acres  in  various  States.  It  is  safe  to  say  that  not 
less  than  forty  million  acres  of  the  land  of  this  nation  is  owned 
in  Europe. 

It  is  well  known  to  those  who  have  even  casually  looked 
into  the  matter  that  foreign  land-owning  has  much  impeded 
the  development  of  the  Western  commonwealths.  These  great 
land-owners  positively  refuse  to  sell.  They  prefer  to  establish 
a  system  of  agencies  and  bailiffs,  with  the  result  that  very 
serious  complications  have  resulted.  The  State  legislatures 
have  done  their  best  to  deal  with  the  question,  but  with  only 


The  Land  Question.  1 19 

indifferent  success.  Viscount  Scully  has  for  years  been  a 
thorn  in  the  path  of  one  State  administration  after  another, 
and  his  shrewdness  in  evading  every  provision  of  law  directed 
against  him  has  extorted  the  unwilling  admiration  of  thou- 
sands. This  Scully  practically  owns  in  Illinois  the  best  part 
of  the  counties  of  Logan,  Livingston  and  Tazewell.  The  State 
in  1887  passed  an  alien  land  law,  directed  solely  against  Scully. 
To  evade  it  he  insisted  beforehand  upon  a  clause  in  all  his 
leases  stipulating  that  the  lessee  should  pay  all  taxes  accruing 
against  the  property  leased.  The  result  was  the  creation  of  a 
large  and  solid  body  of  voters  in  the  Scully  counties,  as  they 
are  called,  opposed  to  propositions  of  public  improvement  by 
taxation. 

The  war  against  Scully  in  Illinois  threw  the  other  British 
land -owners  into  a  panic,  and  as  fast  as  leases  have  fallen  in 
they  have  been  renewed  under  heavier  and  heavier  conditions. 
Alien  land  laws  have  occupied  the  attention  of  legislatures, 
and  in  Kansas  and  Nebraska  the  struggle  for  a  timo  had  a 
serious  effect  upon  land  securities  of  all  kinds. 

Finally  matters  came  to  such  a  deplorable  stage  that  a 
committee  of  the  American  tenantry  was  appointed  to  present 
a  memorial  to  the  London  owners  of  land,  setting  forth  the 
ruin  that  stared  the  Western  farmers  in  the  face  as  a  result  of 
the  rack-renting  system  that  had  been  evolved  out  of  chaos. 
This  memorial  had  a  marked  effect  upon  the  Baroness  Burdett- 
Coutte,  who  insisted  upon  no  more  eviction  of  American 
farmers.  It  only  aggravated  the  Duke  of  Sutherland,  how- 
ever, who  was  then  in  sore  need  of  funds,  and  he  cabled  his 
agent  to  collect  the  rents  and  send  them  over  at  all  hazards. 

Finding  that  mild  measures  availed  nothing,  the  tenantry 
resorted  to  a  more  radical  expedient.  An  association  was 
formed  in  1894,  in  Illinois,  Nebraska,  Iowa  and  Kansas,  to  re- 
sist to  the  utmost  the  demands  of  the  English  landlords.  The 
orgamV/ation  is  a  secret  one  and  is  the  first  really  agrarian 
agitation  in  American  history. 


"HE  who  has  no  clear,  inherent  right  to  live  somewhere 
has  no  right  to  live  at_all." — Horace  Grecley. 


ft " Men  lived  without  gas.  Men  lived,  drawing  their  water 
from  wells  and  springs,  before  water-works.  Men  lived  with- 
out railways.  Aye,  men  have  lived,  and  could  live  again,  with- 
out money.  But  no  man  ever  lived,  no  man  can  live,  without 
land."— HENRY  GEORGE, 


AN  EXPOSITION  OF  THE  SINGLE  TAX. 

•^ 

BY  W.  F.  COOLING. 

TpHE  Single  Tax  is  the  name  given  to  a  form  of  taxation 
*•  proposed  by  Henry  George.  It  is  a  definite,  practical  pro- 
position by  which  the  ancient  formula  of  philosophical  democ- 
racy, "Equal  rights  to  all,  and  special  privileges  to  none,"  ceased 
to  be  a  mere  abstract  generalization.  Like  the  iceberg,  seven- 
eights  of  whose  mass  is  invisible,  the  single  tax  is  the  unsatis- 
factory name  by  which,  the  far-reaching  social  philosophy  of 
the  school  of  Henry  George  is  given  a  local  habitation  in  the 
form  of  its  most  characteristic  and  satisfactory  proposal. 

I. — THE  SINGLE  TAX  AND  PUBLIC  UTILITIES. 

In  a  democratic  eociety,  whatever  one  man  is  permitted  to 
do,  all  should  have  the  right  to  do.  Whenever  a  business  is  of 
such  a  nature,  or,  so  far  as  any  business  is  of  such  nature,  that 
it  is  not  open  to  all,  such  business  should  not  be  permitted  to 
any  private  citizen,  but  should  be  managed  by  the  whole  peo- 
ple through  their  government.  "Where  combination  is  possi- 
ble competition  is  impossible."  It  is  possible  for  any  number 
of  men  to  open  little  retail  stores;  to  engage  in  the  various 
trades,  arts  and  professions;  but  it  is  not  possible  that  the 
business  of  running  street  cars  on  Chicago's  streets  should  be 
open  to  all,  because  the  streets  are  limited  in  number.  So  also 
with  the  water,  gas,  telephone,  electric  light  and  power  supply. 
The  provision  of  these  things  requires  a  special  use  and  mon- 
opoly of  the  public  streets  and  should  be  managed  as  public 
businesses,  because  to  permit  such  business  to  private  enterprise 
would  be  to  confer  a  special  privilege,  and  also  because  the 
public  can  do  the  work  at  much  less  cost  to  the  people  than 

120 


An  Exposition  of  the  Single  Tax.  121 

private  individuals  can.  The  great  national  lines  of  railway, 
for  the  same  reasons,  to  be  more  fully  detailed  hereafter,  fall 
into  the  same  class— as  public  utilities. 

II. — THE  SINGLE  TAX  AND  PRIVATE  PROPERTY. 

Single  taxers  assert  that  the  state  must  secure,  as  far  as  it  is 
possible  for  positive  law  to  do  it,  the  absolute  right  of  every 
adult  person  to  his  or  her  faculties  and  labor  products.  Every 
man  must  be  recognized  as  the  owner  of  himself.  It  may  be 
true  that  in  a  certain  sense  we  all  belong  to  each  other  and  to 
God,  and  that  no  man  has  an  absolute  property  in  himself  or 
anything  which  his  labor  produces.  But  it  is  also  true  that 
the  moral  right  or  interest  which  others  may  have  in  our  labors 
is  one  which  generally  is  incapable  of  enforcement  by  the  state. 
It  is  only  in  the  case  of  war,  pestilence  or  some  other  unusual 
but  definite  danger  threatening  the  community,  that  the  abso- 
lute individual  right  to  life  and  property  determines,  because 
the  danger  which  threatens  the  community  is  a  concrete  one 
against  which  a  certain  definite  defense  can  be  made,  and  be- 
cause this  condition  of  danger  is  temporary  and  unusual.  In  a 
similar  manner  it  may  be  said  to  be  the  duty  of  every  person  to 
associate  with  some  religious  body,  but  that  duty  is  not  enfor- 
cible  by  the  state  because  it  can  never  determine  what  religion 
ia  the  right  one. 

For  these  reasons  the  state  must  leave  to  the  individual 
conscience,  to  the  sentiment  of  the  age,  as  well  as  to  the  sense 
of  individual  self-interest,  the  working  out  of  the  subtle  prob- 
lems of  association.  The  state  must  build  upon  the  secure 
foundation  of  private  property  in  the  products  of  labor  and  the 
greatest  possible  personal  liberty  of  association.  In  order, 
therefore,  that  any  one  may  be  secure  in  the  possession  and  en- 
joyment  of  the  products  of  his  own  labor,  he  must  have 
permanent  and  exclusive  possession  of  the  land  upon  which  he 
has  placed  valuable  and  lasting  improvements.  Otherwise  no 
forest  would  be  cut  down,  no  swamps  drained,  none  of  the 
great  improvements  would  be  erected  which  are  characteristic 
of  civilized  man.  The  first  step  in  the  direction  of  civilization 
and  the  development  of  the  higher  arta  was  taken  whan  th* 


122  An  Exposition  of  the  Single  Tax. 

individual  right  of  permanent  and  exclusive  possession  of  land 
was  recognized. 

III.— THE  SINGLE  TAX  AND  INALIENABLE  EIGHTS. 

The  Declaration  of  Independence  says:  "All  men  are  en- 
dowed by  their  Creator  with  certain  inalienable  rights;  among 
these  are  life,  liberty  and  the  pursuit  of  happiness."  Therefore 
if  a  man  has  a  right  to  life  which  cannot  without  act  of  his 
ever  be  alienated,  he  has  also  an  equal  right  to  the  natural 
means  by  which  life  is  sustained.  That  is  to  say,  his  right  to 
himself  conceded,  he  has  an  equal  right  with  all  other  men  to 
the  world  which  God  has  created,  or  to  nature,  with  all  her 
forces  and  substances.  This  great  truth  has  been  recognized 
in  all  ages,  as  well  by  the  savage  as  the  civilized  man. 
IV. — THE  SINGLE  TAX  AND  GROUND  RENT. 
How,  then,  shall  the  common  and  inalienable  right  of  each 
succeeding  generation  of  men  to  the  earth- to  nature's  store- 
house— be  harmonized  with  the  necessity  of  permanent  exclu- 
sive possession? 

Ground  rent,  or  the  rental  value  which  attaches  to  land  as 
a  cleared  site,  is  the  measure  of  the  advantage  which  the  ex- 
clusive possessor  of  land  has  over  the  one  who  has  no  other 
land  than  such  as  may  be  had  by  all  on  equal  terms.  It,  there- 
fore, exactly  expresses  the  value  of  the  special  privilege  pos- 
sessed by  the  possessor  of  land.  It  measures  the  extent  of  the 
invasion  of  the  inalienable  common  rights.  Rent,  or  the  price 
paid  for  the  use  of  land,  is  of  three  kinds: 

1.  Speculative  Monopoly  Rent. 

2.  Monopoly  Rent. 

3.  (Economic)  Rent. 

3.  Economic  rent  is  the  value  that  would  attach  to  land 
when  all  valuable,  but  not  necessarily  all  useful  land  is  put  to 
its  proper  use.  This  is  the  single  tax. 

2.  Monopoly  rent  is  the  price  that  may  be  extorted  from  a 
tenant  and  user  of  it  for  the  use  of  land  when  all  useful  land  is 
subject  to  private  ownership. 

This  is  the  kind  of  rent  paid  when  all  or  nearly  all  the  land 
is  held  by  great  entailed  estates. 


An  Exposition  of  the  Single  Tax.  123 

1.  Speculative  monopoly  rent  is  the  price  that  may  be  ex- 
torted from  a  speculation  in  land  which  includes  the  present 
monopoly  rent  together  with  some  amount  estimated  to  be  the 
future  increase  in  value.  This  is  the  worst  kind  of  rent  and  is 
the  kind  usually  paid  in  the  United  States. 

When,  therefore,  valuable  land  is  permitted  to  be  withheld 
from  use  by  speculators,  the  land  which  may  be  had  free  is  less 
in  quantity  and  in  usefulness.  Land-users  are  driven  to  land 
of  less  and  less  utility  or  are  compelled  to  pay  as  rent  for  the 
more  desirable  the  difference  between  the  productiveness  of 
their  labor  on  that  land  and  upon  the  relatively  useless  land 
which  may  be  had  for  nothing.  But  if  we  were  to  increase  the 
quantity  of  useful  land  which  could  be  had  free  rent  would  nec- 
essarily fall,  and  if  all  useful  land  not  in  use  could  be  had  for 
nothing  the  rent  of  land  would  fall  to  its  lowest  possible  price — 
economic  rent. 

There  are  many  children  in  our  large  cities  who  do  not  know 
that  milk  comes  from  cows,  or  the  simplest  details  of  husban- 
dry. This  state  of  childish  thoughtlessness  is  not  uncommon 
to  many  would-be  reformers.  The  fundamental  question  in 
economics  js  the  relation  of  man  to  land.  All  wealth  is  the  re- 
sult of  labor  applied  to  land.  Those  who  are  paid  for  the  per- 
mission to  use  the  earth  get  something  for  nothing.  In  all 
cases  the  value  of  land  is  a  social  growth,  not,  like  improve- 
ments, the  result  of  individual  labor.  All  labor  can  be  divided 
into  two  kinds,  viz.:  primary  labor,  or  the  so-called  extractive 
processes,  the  work  of  those  who  in  the  first  instance  apply 
their  labor  to  land,  as  miners,  lumbermen,  fishermen,  graziers 
and  farmers;  adn  secondary  labor,  which  is  the  work  of  those 
who  prepare  the  raw  products  of  primary  labor  for  the  use  of 
the  consumer.  The  wealth  which  passes  through  the  chan- 
nels of  trade  takes  its  origin,  like  the  waters  of  the  Mississippi, 
in  countless  multitudes  of  small  producers  engaged  in  the  pri- 
mary or  extractive  processes,  from  whom  the  lines  of  trade 
converge  into  the  great  visible  establishments  which  areas  de- 
pendent upon  the  primary  producers  for  their  life  and  being  as 
the  tree  trunk  is  upon  its  roots.  Thus  we  would  stimulate 


134  An  Expotition  of  the  Single  Tax. 

production  at  its  origin,  by  throwing  open  to  primary  labor  the 
vast  areas  of  unused  land. 

Under  any  form  of  society  some  revenue  would  be  needed 
by  the  government.  Taxes  now  levied  upon  houses,  goods,  ma- 
chinery, and  license  taxes,  are  necessarily  part  of  the  cost  of 
production,  and  increase  the  price  of  the  article.  Such  taxes 
are  always  shifted  to  the  consumer.  But  the  tax  on  the  value 
of  land  cannot  be  shifted  by  the  owners  of  vacant  and  unused 
land,  because  there  are  no  tenants;  nor  by  the  owner  of  highly 
improved  land,  because  he  now  gets  all  the  tenants  can  pay. 
But  as  the  tax  forces  the  vacant  land  into  use  or  into  the  mar- 
ket the  value  of  all  land  will  fall.  So  a  tax  on  the  value  of  land 
reduces  rent.  The  existing  tenant  or  future  would-be  user  of 
land  would  have  his  taxes  abolished  and  his  rent  reduced.  The 
owner  of  improved  land  would  have  no  taxes  to  pay  on  his  im- 
provements, and  the  fall  in  the  price  of  other  lands  would  re- 
duce his  tax,  so  that  generally  the  owner  of  improved  lands 
would  have  less  to  pay  than  under  the  present  system  if  taxes 
were  properly  assessed.  But  the  land  speculator,  although  hit 
hard,  could  console  himself  with  the  fact  that  he  could  with- 
out charge  replace  his  vacant  land,  the  value  of  which  was 
confiscated  by  the  single  tax,  by  any  piece  of  land  remaining 
unused. 

The  value  of  land  is  something  quite  apart  from  its  nat- 
ural utility.  There  is  much  fertile  land  in  different  parts  of 
the  world  to  which  no  value  attaches.  An  acre  of  corn  land  in 
Kansas  diffe/s  much  in  value  from  an  acre  of  equal  fertility 
and  devoted  to  the  same  use  near  Chicago.  The  value  of  any 
piece  of  valuable  land  is  the  difference  between  the  product- 
iveness of  labor  upon  it  and  the  best  land  which  can  be  had 
for  nothing. 

In  the  most  primitive  kind  of  society  the  individual  family 
will  approach  very  nearly  to  the  condition  of  Robinson  Crusoe. 
They  will  be  able  by  constant  labor  to  maintain  themselves  in 
a  rude  sufficiency.  But  as  population  increases  a  subdivision 
and  more  complex  association  of  labor  begins.  There  is  a  gain 
which  results  to  the  community  by  reason  of  the  various  mem- 
bers Batting  themselves  apart  with  systematic  association  to  do 


An  Expotition  of  the  Single  Tax.  126 

the  things  which  each  can  best  accomplish.  Twenty  men 
working  together  intelligently  can  do  much  more  than  twenty 
times  the  work  of  one,  and  this  return  to  labor  increases  with 
every  new  improvement  in  productive  processes  and  every  new 
addition  to  the  community.  It  has  been  estimated  by  statisti- 
cians in  the  employ  of  the  United  States  Census  Department 
that  the  labor  of  one  farmer  to-d'ay  working  under  modern  con- 
ditions is  more  productive  than  the  combined  labor  of  not  less 
than  twenty  men  forty  years  ago.  It  is  evident  that,  while 
some  farmers  are  much  better  off,  and  a  few  worse  off, 
none  have  benefited  to  the  extent  to  which  their  productive 
power  has  been  increased. 

This  net  gain  which  is  the  result  of  association  and 
improved  processes  is  not  evenly  distributed.  The  benefits  of 
association  and  subdivision  of  labor  are  realized  to  the  fullest 
extent  by  those  who  employ  themselves  within  the  area  where 
association  in  production  is  most  general  and  where  subdivis- 
ion of  labor  is  most  intense.  Those  who  realize  this  net  gain 
to  the  least  extent  are  those  who  employ  themselves  at  places 
remote  from  the  centers  of  the  highest  social  activity  and 
where  association  in  productive  processes  and  the  subdivision 
of  labor  is  practiced  to  the  least  extent.  The  result  is  that  the 
net  gain  resulting  from  improved  methods  is  appropriated  by 
those  who  control  the  areas  so  utilized  for  high  organization 
and  subdivision  of  labor ;  that  is,  the  valuable  land  and  privi- 
leges running  with  such  land,  except  so  far  as  this  gain  is 
shared  by  those  who  have  access  to  free  land.  But,  as  it  is 
upon  free  land  that  labor  to  the  least  extent  participates  in  the 
net  gain  resulting  from  improved  methods,  there  is  a  constantly 
increasing  advantage  to  those  who  have  the  power  to  appropri- 
ate the  larger  part  of  the  gain  which  results,  not  from  their 
individual  labor,  but  from  the  profits  of  association.  This 
advantage  is  capitalized  in  the  value  of  land,  the  rights  of  way  of 
railroad  and  other  companies  which  possess  exclusive  privileges 
running  with  the  land. 

The  increase  in  the  productiveness  of  labor  by  reason  of 
the  advance  of  our  civilization  belongs  of  right  to  all.  In  thia 
gain  all  have  the  same  right  to  share  on  equal  terms.  Hence 


126  An  Exposition  of  the  Single  Tax. 

the  single  tax,  by  appropriating  the  amount  which  is  unjustly 
taken  from  the  common  gain  by  the  monopolizers  of  these  spe- 
cial privileges,  and  by  devoting  it  for  the  common  use  of  all, 
would  lay  the  secure  foundations  of  a  true  co-operative  com- 
monwealth by  socializing  the  value  of  unequal  opportunities. 

The  taxation  of  ground  values  is  the  direct  tax  of  the  free 
traders  which  cannot  be  shifted. 

The  taxation  of  ground  values  is  the  tariff  (upon  specula- 
tion) that  protects  industry  from  exploitation. 

The  annual  rental  value  of  the  coal  mines  and  timber  lands 
of  the  United  States  in  use  in  1889  was  $451,000,000,  according 
to  Bulletin  No.  70  of  the  Census  Department.  This  alone 
would  support  the  Federal  government. 

When  we  have  abolished  the  fellows  who  get  something 
for  nothing,  then  all  will  co-operate  by  exchange  of  equivalents 
of  service.  All  that  needs  be  done  to  establish  the  co-oper- 
ative commonwealth  is  to  abolish  special  privilege. 

V. — THE  SINGLE  TAX  AND  TRANSPORTATION. 

Prom  the  most  ancient  times  the  care  of  roads  and  bridges 
has  been  an  undisputed  function  of  government.  The  old 
wagon  roads  have  long  ceased  to  be  the  nation's  highways. 

The  monopoly  of  trade  which  results  from  the  private 
ownership  of  railroads  is  one  of  the  characteristics  of  the  age. 
It  has  created  the  Standard  Oil  Company,  which  received  a  "re- 
bate" of  50  cents  on  every  barrel  of  oil  shipped  by  it  and  a  "com- 
mission" of  25  cents  on  every  barrel  of  oil  shipped  by  its  rivals- 
Railroad  monopoly  has  built  up  the  great  packing  monopolies 
of  Chicago  and  is  now  forcing  the  centralization  of  all  business 
in  a  few  hands  by  the  process  of  giving  heavy  rebates,  increas- 
ing in  proportion  to  the  volume  of  business  done. 

Single-taxers  are  not  entirely  agreed  as  to  how  they  will 
dispose  of  this  question.  One  proposition  is  to  pass  a  maximum 
freight  and  passenger  rate  law  and  to  appropriate  by  taxation 
the  value  of  special  privilege  of  the  business.  Another  proposi- 
tion is  that  the  government  should  build  and  maintain  without 
charge  the  roadways  and  let  out  the  operation  of  these  roads 
to  private  competing  companies. 


An  Exposition  of  the  Single  Tax.  127 

VI. — THE  SINGLE  TAX  AND  FREE  TRANSPORTATION. 

Transportation  charges  are  like  taxes  upon  capital.  They 
are  a  part  of  the  cost  of  production  and  must  be  added  to  the 
price  of  the  goods  transported,  and  are  therefore  in  all  cases 
shifted  to  the  consumer.  All,  therefore,  who  use  and  consume 
goods  which  are  transported  over  railways  are  users  of  rail- 
ways, whether  they  travel  upon  them  or  not,  or  whether  they 
are  engaged  in  directly  shipping  goods  or  not.  Transportation 
is  a  means  by  which  the  advantages  of  special  locations  are 
equalized,  and  therefore  any  reduction  in  the  cost  of  transpor- 
tation improves  the  value  of  less  favored  locations  by  giving 
them  access  to  the  best  markets.  It  is  a  notorious  fact  that 
the  building  and  operation  of  any  needed  line  of  transporta- 
tion is  always  followed  by  a  rise  in  the  value  of  land  many 
times  greater  than  the  cost  of  operating  and  building  the  road. 
The  building  of  a  short  line  of  railroad  in  Kansas  some  years 
ago  (the  Solomon  Valley  Railroad)  was  followed  by  a  general 
rise  of  value  in  the  land  many  times  as  great  as  the  cost  of  con- 
structing the  road.  The  building  of  the  south  side  cable  sys- 
tem in  Chicago  a  few  years  ago,  displacing  horse  cars,  was 
immediately  followed  by  a  rise  in  value  of  adjacent  land 
amounting  to  $21,000,000,  according  to  the  Chicago  Real  Estate 
Board, — an  amount  over  four  times  as  great  as  the  cost  of  con- 
structing the  road.  It  is  the  familiar  argument  by  which  farm- 
ers are  induced  to  vote  bonds  for  railroads,  that  the  road  will 
increase  the  value  of  the  lands  more  than  the  amount  of  the 
bonds.  In  all  our  large  cities  are  great  office  buildings  in  which 
elevators  daily  carry  without  charge  hundreds  of  passengers  to 
the  various  floors  of  the  building.  The  increase  of  rent  pays 
more  than  the  cost  of  construction.  For  these  reasons  many 
single-taxers,  and  particularly  Henry  George,  declare  that 
railroads  should  be  built  and  operated  at  public  cost.  The 
increase  in  the  value  of  land  thereby  resulting  would  more 
than  pay  the  expense  of  their  construction,  operation  and 
maintenance.  Under  the  single  tax,  therefore,  all  transporta- 
tion, both  of  freight  and  passengers  and  of  intelligence,  would 
be  free.  Those  who  did  not  directly  use  the  road  themselves 


128  An  Exposition  of  the  Single  Too:. 

would  nevertheless  share  in  the  reduced  prices  of  things  from 
which  the  present  exorbitant  charges  had  been  eliminated. 

VII. — THE  SINGLE  TAX  AND  FAEMERS. 

Farmers  are  the  users  of  the  least  valuable  land,  and  they 
also  are  the  greatest  sufferers  from  excessive  railroad  charges. 
There  is  a  piece  of  land  in  Chicago  that  recently  sold  at  the 
rate  of  $10,000,000  per  acre.  The  ground  rent  of  the  lot  on 
which  the  Rookery  building  stands  realizes  the  city  of  Chicago 
— the  owner — §37,500  per  year.  There  are  many  townships 
which  would  rent  for  less.  Some  years  ago  a  bureau  of  the 
Kansas  State  government  stated  that  there  was  five  times  aa 
much  land  in  the  State  of  such  as  was  worth  $20  per  acre  as 
there  was  in  use.  If  that  was  so,  the  single  tax  on  such  land 
would  not  be  over  twenty  cents  per  acre.  The  user  of  100  acres 
of  land  would  pay  $20  a  year.  Today  he  pays  about  $40  in  State 
and  county  and  township  (direct)  taxes,  and  about  $150  indi- 
rectly in  tariff  taxes,  and  about  $1,500  in  the  reduced  price  of 
his  products  caused  by  the  general  system  of  transportation. 
If  he  has  a  crop  of  corn,  50  bushels  to  the  acre — a  fair  crop — 
Bay  of  5,000  bushels,  he  will  be  obliged  to  sell  it  for  15  cents  per 
bushel.  The  corn  and  other  crops  all  start  to  move  about  the 
same  time.  The  railroads,  in  order  to  force  the  control  of  the 
business  into  the  hands  of  their  agents,  the  elevator  men,  are 
never  willing  to  supply  cars  to  the  independent  shipper.  The 
price  of  corn  in  the  best  markets  in  this  country  is  rarely  less 
than  50  cents  per  bushel.  Under  the  single  tax  the  farmer,  by 
paying  an  insignificant  tax  on  the  unimproved  value  of  the 
land  he  occupied,  would  have  free  access  to  the  home  market. 
If,  therefore,  the  price  of  corn  or  the  purchasing  power  of  money 
would  not  depreciate,  he  would  not  realize  le JB  than  $2,000  per 
year. 

The  farmer  would  have  his  annual  product,  which  he  could 
exchange  in  the  best  market  in  the  country.  The  same  would 
apply  to  all  other  products.  As  the  prices  of  things  in  a  gen- 
eral way  are  an  expression  of  the  proportion  in  which  they  are 
produced,  and  as  the  production  of  corn  would  not  essentially 
vary  from  the  ratio  which  it  now  baars  to  the  production  of 


An  Exposition  of  the  Single  Tax.  129 

other  things,  the  farmer's  corn  would  still  be  exchangeable  for 
the  same  quantity  of  lumber,  clothing  and  other  things  for 
which  it  is  now  exchangeable  in  the  best  markets. 

VIII— THE  SINGLE  TAX  AND  WAGES. 

In  the  early  days  of  California  an  ordinary  unskilled  work- 
man could  get  an  ounce  of  gold  a  day  working  for  himself  with 
average  luck.  As  a  consequence  you  could  not  hire  a  man  to 
wash  dishes  for  less  than  about  $15  per  day.  The  wages  of  un- 
skilled labor  are  determined  by  what  a  man  can  do  working 
for  himself  at  that  employment  which  is  open  to  all.  While 
yet  the  public  lands  remained  unappropriated  and  any  one 
could  take  up  360  acres  of  fairly  good  land  at  nominal  charge, 
his  earnings  determined  the  scale  of  wages  and  the  standard  of 
living  of  all.  If  we  suppose  that  the  land  of  the  Kansas  farmer 
is  worth  now  82,000  and  his  improvements  and  working  capital 
another  $1,000,  and  charge  him  with  current  interest  and  taxes 
upon  a  capital  of  83,000,  and  subtract  this  from  the  value  of  his 
annual  product,  he  will  hardly  realize,  one  year  with  another 
for  his  toil,  over  one  dollar  a  day.  His  only  hope  is  that  he  may 
be  able  to  keep  out  of  debt,  and,  after  a  life  of  the  most  rigid 
economy  and  the  hardest  labor,  be  able  to  live  a  few  years  in 
his  old  age  upon  the  rental  value  of  his  land.  Under  the  single 
tax  he  would  from  the  beginning  realize  a  handsome  return, 
not  less,  under  the  most  conservative  estimates,  than  $2,000 
per  annum. 

When,  therefore,  any  man  who  was  willing  to  work  and 
who  had  the  necessary  capital  could  earn  a  good  living  on  the 
land  which  the  single  tax  would  wrest  from  the  hands  of  idle 
and  useless  speculators,  no  one  who  had  the  capital  needed  to 
improve  and  make  use  of  the  land  would  work  for  less.  When 
any  man  can  show  the  opportunity  to  produce  a  fixed  return, 
he  can  now  and  always  obtain  the  credit  (money)  needed  to  de- 
velop the  opportunity,  on  the  assurance  of  ordinary  honesty 
and  industry.  Under  the  single  tax  capital  would  not  be  in- 
vested in  the  speculative  withholding  of  natural  opportunities, 
sunk  in  idle  land  or  railroad  stocks,  or  government  bonds,  but 
would  be  invested  in  machinery,  building  and  the  constant  em- 


130  An  Exposition  of  the  Single  Tax. 

ployment  of  industry.  Consequently  the  whole  force  of  that 
competition  which  now  exhausts  itself  in  the  struggle  for  oppor- 
tunity, which  the  single  tax  would  make  free  to  all,  would  then 
be  exerted  in  extending  credits  and  in  inviting  the  stranger 
and  the  unemployed  to  develop  on  equal  terms  the  resources 
of  a  common  country.  For  when  special  privileges  are  abol- 
ished, those  enterprises  in  which  men  do  not  formally  co-operate 
are  socialized  by  competition.  Competition  is  a  good  thing. 
It  cannot  be  said  to  exist  to-day  on  any  general  scale,  because 
of  the  unequal  terms  on  which  producers  are  compelled  to  as- 
sociate. The  plan  of  single-taxers  has  nothing  in  common  with 
the  so-called  "socialists"  who  denounce  competition.  The 
motto  of  Turgot  was  not  "Let  things  alone,"  that  is,  give  free 
play  to  the  existing  economic  system,  as  "socialistic"  writers 
and  our  ignorant  college  professors  persistently  misrepresent, 
but  "Clear  the  ways,  and  let  things  alone." 

IX. — THE  SINGLE  TAX  AND  THE  MONEY  QUESTION. 

Ground  rent,  being  the  exponent  of  the  difference  between 
the  productiveness  of  labor  on  valuable  land  and  free  land,  is 
the  natural  measure  of  that  competition  which  is  the  origin  of 
prices.  When  the  government  is  in  receipt  of  ground  rent,  and 
is  performing  the  proper  functions  pertaining  to  it,  which  in- 
clude free  transportation,  it  will  then  be  enabled  to  issue  a 
paper  currency,  equal  in  volume  to  its  last  year's  revenue,  which 
shall  be  a  legal  tender  for  all  public  debts.  Under  the  single 
tax  there  can  be  no  inflation  of  land  values,  and  as  land  is  the 
physical  basis  of  life,  the  one  object  of  primary  and  necessary 
utility,  the  economic  value  that  attaches  to  land  will  always  "re- 
deem" the  currency.  In  a  growing  civilization  land  values  as  a 
whole  are  constantly  increasing.  All  that  is  needed  to  forever 
settle  the  money  question  permanently  on  a  scientific  basis  is — 

1.  The  single  tax  on  land  values. 

2.  The  conversion  of  present  units  of  value  into  terms  of 
economic  rent. 

It  will  be  noted  that  nothing  is  here  said  about  making 
this  money  legal  tender  for  private  debts.  While  it  may  be 
just  to  declare  that  this  currency  could  be  legal  tender  for  all 


An  Exposition  of  the  Single  Tax.  131 

existing  debts,  it  is  greatly  to  be  questioned  whether  the  estab- 
lishment of  a  legal  tender  for  private  debts  is  a  function  of  the 
government.  The  unit  which  is  receivable  as  legal  tender  for 
public  debts  will  serve  as  a  general  standard  of  reference,  but 
private  individuals  contracting  with  each  other  should  be  free 
to  make  such  terms  and  to  issue  such  bills  of  credit  and  private 
paper  as  they  choose. 

X. — DEBTS  AND  MORTGAGES. 

So  long  as  private  ownership  in  ground  rent  and  trans- 
portation exists  labor  i  s  reduced  to  a  bare  subsistence.  Mon- 
opoly of  land  enables  the  owner  to  charge  the  tenant  all  he 
can  make  above  a  fair  living,  and  monopoly  of  transportation 
enables  the  lords  of  transportation  to  exploit  the  landlords 
and  tends  to  reduce  them  to  the  condition  of  mere  agents  of 
the  transportation  monopoly.  Under  these  conditions,  when 
the  average  return  is  no  more  than  a  bare  living,  the  ordinary 
vicissitudes  of  business — bad  crops  or  an  unexpected  fallj  in 
prices — tend  to  gradually  involve  the  masses  of  men  hopelessly 
in  debt.  They  are  caught  like  n'shes  in  an  invisible  net,  from 
which  only  the  exceptionally  vigorous  or  fortunate  escape. 
Such  is  the  condition  of  a  majority  of  the  farmers  of  the 
frontier,  the  small  business  men  of  the  cities,  the  mechanics 
and  wage-earners,  whose  employment  is  constantly  becoming 
more  uncertain  and  less  remunerative  and  whose  means  of 
subsistence  or  whose  homes  are  mortgaged  or  charged  with 
debt.  The  single  tax  will  relieve  these  by  making  it  possible 
for  them  to  pay  their  debts  honestly. 

XI. — THE  SINGLE  TAX  AND  TRUSTS  AND  MONOPOLIES. 

Monopoly  is  a  word  which  is  derived  from  the  Greek  lan- 
guage and  which  means  that  the  sale  of  the  article  of  trade  in 
question  is  under  one  control.  It  is  often  used  to  mean  exclus- 
ive possession  or  control  in  the  sense  of  exclusive  property. 
Thus  we  speak  of  land  monopoly,  meaning  that  the  control  of 
land  is  concentrated  in  the  hands  of  a  few;  of  railroad  monop- 
oly, meaning  that  the  control  of  the  common  highways  is  not 
in  the  hands  of  the  people.  When  the  sources  of  production, 
i.  e.t  the  land  and  the  highways,  are  in  the  hands  of  a  few,  the 


132  An  Exposition  of  the  Single  Tax. 

control  of  trade,  or  rather  the  commodities  of  trade,  falls  under 
the  same  control.  There  are  also  other  sources  of  monopoly, 
such  as  patent  laws,  the  partial  exemption  possessed  by  stock- 
holders in  corporations  from  the  laws  which  enforce  the  obli- 
gation of  contracts,  and  laws  creating  restrictions  upon  the 
natural  right  of  self-employment,  such  as  license  taxes  and 
trade  restrictions.  Nearly  all  the  trusts  and  monopolies  are 
rooted  in  privileges  of  this  kind.  The  Standard  Oil  Company 
could  not  maintain  control  of  the  business  it  now  holds  at 
present  prices  when  the  sources  of  supply,  the  oil  wells,  are 
forced  into  use  by  the  single  tax,  and  when  transportation 
charges  are  eliminated. 

The  throwing  open  to  all  of  the  markets  of  trade  by  free 
transportation  and  the  natural  sources  of  production  by  the 
single  tax  would  insure  such  large  returns  to  primary  labor 
that  no  workman  woujd  be  satisfied  with  wages  less  in  amount 
than  he  could  earn  working  for  himself.  And  when  in  all  our 
shops  and  factories  the  lowest  return  given  to  the  mere  man- 
ual labor  of  the  able-bodied  man  is  not  less  than  $1,500  to 
$2,000  per  year,  it  will  not  be  long  before  the  ownership  and  con- 
trol of  the  plants  and  machinery  of  important  enterprises  will 
be  distributed  among  all  those  who  desire  to  assume  the  care 
and  responsibility  of  such  management.  Any  business  which 
is  protected  by  no  special  privilege  and  which  is  open  to  all  on 
equal  terms  will  fall  under  one  control  whenever  such  business 
is  conducted  with  superior  management,  presenting  cheaper 
and  more  ready  service  than  any  of  its  competitors.  In  such 
case  the  economies  of  management  do  not  result  in  paying 
unusual  dividends,  but  in  cheaper  goods.  In  this  kind  of 
monopoly  all  share.  The  management  which  controls  the  busi- 
ness acts  as  the  servant  of  the  public.  Competition  will  reduce 
the  profits,  when  excessive,  to  the  normal  condition.  Under 
conditions  of  equal  freedom,  ability,  whether  individual  or 
associated,  cannot  exert  itself  in  withholding  opportunities. 
That  is  the  only  way  by  which  now  and  in  the  past  the  inferior 
have  been  exploited  or  robbed  by  the  euperior,  the  shrewd, 
cunning  and  unscrupulous.  Ability  can  then  only  exert  itself 
in  some  productive  act,  some  service  to  the  community. 


An  Exposition  of  the  Single  Tax.  133 

Among  some  superficial  writers  who  follow  the  leadership 
of  Edward  Bellamy  marked  inability  exists  to  distinguish 
between  land  as  a  natural  element,  the  value  which  attaches 
to  land  and  special  privileges  which  are  capitalized  and  sold  as 
marketable  commodities,  and  real  capital.  Capital  in  an  eco- 
nomic sense  is  wealth,  i.  e.,  a  product  of  labor,  which  is  devoted 
to  the  production  of  more  wealth,  or,  as  Henry  George  defines 
it,  "Capital  is  wealth  in  the  course  of  exchange."  Although  a 
man  who  owns  much  land,  notes  and  valuable  privileges  is 
accounted  wealthy,  this  kind  of  property  is  not  wealth.  Land 
is  not  wealth,  although  exchangeable  for  wealth,  but  an  oppor- 
tunity of  producing  wealth.  The  valuable  slave  was  not 
wealth  in  an  economic  sense,  although  wealth  in  a  commercial 
sense.  Much  of  what  now  passes  for  wealth  in  our  markets  j 
is  merely  unjust  rights  and  privileges  which  the  single  tax 
will  abolish  and  render  valueless. 

True  wealth,  in  an  economic  sense,  is  the  result  of  the 
application  of  labor  to  the  natural  bounties  of  the  earth.  As 
such  it  is  perishable  ;  nature  wages  incessant  war  against  it.  ' 
Let  human  labor  cease  throughout  the  entire  world  for  but  a  few 
days,  and  millions  would  perish.  Let  it  cease  for  a  few  years, 
and  little  would  remain  to  mark  the  ruin  of  the  race.  The 
owners  of  capital  as  such  possess  no  monopoly.  The  posses- 
sions of  the  wealthy  are  perishable  and  require  constant  care. 
The  ownership  of  tangible  wealth  is  not  the  security  of  the 
rich,  but  the  land  and  special  privileges  which  they  possess,  for 
which  they  can  always  command  a  return  from  the  productive  / 
labor  of  others. 

"  What,"  says  Henry  George,  "  does  God  Almighty  give  to 
man,  but  the  power  to  labor  and  land  ! "  Land  is  the  physical 
basis  of  life ;  the  essential  condition  of  the  exercise  of  all  pro- 
ductive labor. 

The  selfish  instinct  which  in  its  proper  field  is  just  and 
natural  is  thus  made  to  harmonize  with  the  highest  expression 
of  "  altruism,"  for  in  a  well  ordered  society,  associating  under 
conditions  of  equal  freedom,  the  struggle  for  self  assumes  the 
concrete  form  of  a  struggle  for  others.  It  is  only  as  the  others 
will  gain  by  the  individual  effort,  and  to  the  extent  of  that  gain, 


134  An  Exposition  of  the  Single  Tax. 

that  the  individual  effort  will  become  profitable.  The  single 
tax  philosophy  is  the  logical  development  of  the  saying  of  Tur- 
got  over  one  hundred  years  ago.  A  caricature  of  this  is  what 
is  represented  under  the  name  of  "Laissez  faire"  or  "Let 
alone."  The  single- taxers  do  not  say  to  the  state,  "Hands 
off ,"  but  " CLEAR  THE  WAYS!" — that  is,  remove  special  privi- 
leges, throw  open  the  natural  bounties  by  the  single  tax  upon 
land  values,  take  possession  of  the  highways,  and  then  "LET 
THINGS  ALONE!" 

XII. — THE  SINGLE  TAX  AND  ANCIENT  LAW. 

The  single  tax  is  but  the  application  to  the  conditions  of 
modern  life  of  the  fundamental  principles  of  justice  which 
everywhere  have  been  recognized  by  ancient  law  and  by  the 
great  law-givers  of  the  past.  This  is  particularly  noticeable 
in  the  Mosaic  code.  Moses  knew  well  what  would  become 
of  the  poor,  the  less  favored  in  shrewdness  and  cunning,  when 
divorced  from  land.  Learned  in  all  the  wisdom  of  the  Egyp- 
tians,— a  civilization  not  unlike  what  ours  is  rapidly  tending  to 
be,  and  which  had  fallen  into  a  condition  of  monopoly-ridden 
servitude,  by  failing  to  harmonize  the  necessity  of  exclusive 
possession  with  the  common  right  of  all  to  land, — Moses  provid- 
ed that  the  land  of  his  people  should  be  apportioned  to  tribes 
and  to  families  for  their  inheritances.  These  inheritances 
were  inalienable. 

"The  land  shall  not  be  sold  forever :  for  the  land  is  mine ; 
for  ye  are  strangers  and  sojourners  with  Me" — Leviticus 
25 :  23. 

But  these  inheritances  could  be  leased  from  jubilee  to 
'ubilee,  49  years,  and  for  shorter  periods,  every  lease  termin- 
ating at  the  same  time,  and  the  landless  were  restored  to 
their  family  inheritance.  Every  seven  years  all  debts  not, 
paid  were  released  at  the  same  time.  So  that  there  could 
neither  be  a  landless  nor  a  debtor  class  permanently  among 
them.  Among  no  class  of  people  has  labor  been  more  highly 
esteemed  than  in  this  ancient  and  only  national  democracy  f 
in  the  economic  sense,  which  the  world  has  yet  seen.  The 
primitive  institutions  of  all  races  established  in  eome  form 
common  right  in  land.  Among  the  ancient  German  people 


An  Exposition  of  the  Single  Tax-  135 

the  land  was  re-divided  every  two  years.  Some  traces  of  this 
custom  still  exist  in  English  law.  Under  the  feudal  system 
land  ownership  was  contingent  upon  return  to  the  state  of 
what  is  now  equivalent  to  taxes.  The  recent  decision  of  the 
United  States  Supreme  Court  in  the  Lake  Front  cases,  that 
the  right  of  the  people  to  the  navigable  waters  of  Lake 
Michigan  could  not  be  inalienated  even  by  the  Legislature  of 
Illinois,  is  the  enfeebled  and  decrepid  form  in  which  has  come 
down  to  us  the  ancient  doctrine  that  the  right  of  all  the  peo- 
ple to  the  more  valuable  land — which  is  not  under,  water — is 
inalienable. 

XIII. — THE  SINGLE  TAX  AND  OVER-POPULATION. 

The  college  professors  and  their  allies,  the  defenders  of  all 
existing  monopolies  and  unjust  laws,  whose  business  it  is  to 
obscure  the  most  simple  matters,  say  that  population  tends  to 
outstrip  the  means  of  subsistence.  This  pernicious  teaching, 
which  attempts  to  unload  the  results  of  unjust  laws  upon  an 
imagined  "  niggardliness  of  Nature,"  as  one  writer  puts  it,  is 
very  satisfactory  to  the  privileged  classes,  who  affect  to  see  in 
the  persistence  of  poverty,  and  the  increase  of  those  who  can 
find  no  satisfactory  or  profitable  employment,  the  manifesta- 
tion of  an  inevitable  consequence  of  the  natural  increase  of  the 
population.  So-called  men  of  science,  possessing  a  slight 
acquaintance  with  the  theory  of  evolution,  point  out  the  extraor- 
dinary productiveness  of  organisms,  animal  and  vegetal,  and 
conclude  that  the  consequences  of  the  tendency  to  increase  of 
low-grade  organisms  applies  in  the  same  manner  to  man.  The 
fecundity  of  the  lower  forms  of  life,  however,  is  a  source  of 
gain.  None  of  these  inferior  creatures  have  the  power  to  mod- 
ify their  surroundings  to  their  own  needs.  By  reason  of  his 
intelligence  the  human  animal  is  master  over  nature,  and  prof- 
its both  by  the  increase  of  his  own  species  and  by  the  fecund- 
ity of  others. 

Some  time  ago  a  clergyman  of  local  reputation  addressed 
the  Chicago  Single  Tax  Club  on  the  necessity  of  restricting 
emigration.  After  the  address  one  of  the  members  related 
that  some  time  ago  he  ate  some  caramels  and  shortly  had  a 
severe  toothache.  Assuming  that  the  trouble  was  due  to  the 


136  An  Exposition  of  the  Single  Tax. 

diseased  condition  of  his  teeth,  and  not  to  the  presence  of  the 
candy,  per  se,  he  went  to  a  dentist  and  had  his  teeth  filled. 
"  What  ought  I  to  have  done,  quit  eating  candy,  or  visited  the 
dentist  ?  "  The  clergyman  said  he  should  have  stopped  eating 
the  caramels  if  he  could  not  have  found  a  dentist.  "  But," 
said  he,  "  the  services  of  the  dentist  were  to  be  had, — eating 
the  caramels  accentuated  their  condition  and  indicated  unmis- 
takably that  the  teeth  were  in  an  unnatural  and  unhealthy 
condition,  and  thereby  gave  warning  that,  unless  a  remedy  was 
applied,  the  teeth  would  be  ruined.  Now,  if  I  had  not  eaten 
the  candy  I  would  not  have  known  the  condition  of  my  teeth. 
By  prompt  attention  to  the  real  cause  of  the  trouble  I  have 
saved  myself  serious  inconvenience  and  the  utter  destruction 
of  my  teeth.  Now,  should  we  try  to  stop  the  natural  increase 
of  the  population,  by  immigration  or  otherwise,  or  intelligently 
examine  into  the  fundamental  cause  of  which  our  so-called  over- 
population is  only  a  superficial  symptom.  We  have  the  single 
tax  as  ready  at  hand  as  I  had  the  dentist." 

The  professors  assert  the  existence  of  two  laws,  viz.: 

1.  The  Law  of  Increasing  Returns. 

2.  The  Law  of  Diminishing  Returns. 

The  first  of  these,  they  affirm,  applies  only  to  the  raw 
materials  that  have  already  been  extracted  from  the  earth, 
while  the  law  of  diminishing  returns  determines  how  great  the 
supply  of  these  shall  be;  hence,  they  say,  one  can  not  neutral- 
ize the  other. 

There  is  no  department  of  human  activity,  unless  it  be  the 
teaching  of  political  economy  in  our  colleges,  which  has  not 
been  invaded  by  the  intelligence  of  the  age.  The  introduction 
of  improved  processes,  scientific  methods  and  labor-saving 
machinery  has  been  especially  marked  in  the  so-called  "extract- 
ive processes."  It  has  been  shown  by  competent  statisticians 
that  in  agriculture  the  labor  of  one  man  to-day  will  produce 
greater  results  than  that  of  twenty  men  fifty  years  ago.* 

"Thus,"  says  one  who  had  carefully  investigated  this  phase 
of  the  subject,  "  one  man  with  a  harvester  does  the  work  of 

*Wm.  G.  Moody:  Land  and  Labor  in  the  Unitod  States.  Edward 
Atkinson:  Distribution  of  Products.  First  Report,  Commissioner 
of  Labor  U.  8.,  called  "Industrial  Depressions." 


An  Exposition  of  the  Single  Tax.  137 

three  hundred  and  twenty  men  sixty  years  ago.  As  compared 
with  fifty  years  ago,  in  ploughing,  one  man  now  does  the  work 
of  twenty-four;  in  seeding  grain,  one  does  the  work  of  ten;  in 
corn-shelling,  one  does  the  work  of  one  hundred  and  fifty. 
There  are  machines  that  cut,  thresh  and  winnow  the  grain  at 
one  operation.  Four  men  with  one  of  these  machines  do  the 
work  formerly  requiring  three  hundred  men."  * 

These  economies  in  extractive  processes  were  effected  in 
this  country  while  yet  there  remained  vast  areas  of  govern- 
ment land  subject  to  settlement  at  nominal  cost.  Present 
methods  of  cultivation  will  undoubtedly  be  superseded  by  a 
more  intensive  culture  which  will  yield  larger  returns.  The 
experiments  of  Prince  Krapotkine,  near  Paris,  France,  have 
developed  the  possibilities  of  intensive  culture.  Upon  an  acre 
and  one-half  of  ground  he  employs  sixty-five  men  profitably. 

The  land  of  the  United  States  available  for  agriculturei 
mining,  fisheries  and  other  extractive  processes  is  only  used  to 
a  small  extent.  One  authority  says  that  only  one-eighth  of 
such  land  is  in  use.  For  all  practical  purposes  the  possibility 
of  over-population  is  as  remote  from  reasonable  consideration 
as  the  day  when  the  earth,  by  dissipation  of  its  internal  heat, 
shall  become  uninhabitable.  When  opportunities  are  equal 
the  benefits  of  association  are  shared  by  all  in  exact  proportion 
to  their  industry  and  ability.  The  more  numerous  the  popula- 
tion the  greater  the  return  to  the  individual  laborer.  If  a  gen- 
eral and  permanent  rise  in  wages  were  to  attract  to  the  United 
States  the  population  of  the  old  world,  the  result  must  inevita- 
bly be  to  effect  greater  economies  in  production,  which,  under 
the  single  tax,  would  increase  the  return  to  labor  and  industry. 

Some  Apt  Quotations. 

"Th«  earth  is  the  common  property  of  all  men." — Pope 
Gregory  the  Great. 

"No  man  made  the  land;  it  is  the  original  inheritance  of 
the  species." — John  Stuart  Mill. 

"The  original  deeds  were  written  with  the  sword  rather 
than  with  the  pen." — Herbert  Spencer. 

*Econ6mic   Conferences,  Chicago,  Fourth   Session,  March  10. 
1889.    Address  by  Jesse  Cox. 


138  An  Exposition  of  the  Single  Tax. 

"The  greatest  discovery  of  my  life  is  that  the  men  who  do 
the  work  never  get  rich." — Andrew  Carnegie. 

"The  earth  belongs  in  usufruct  to  the  living;  the  dead 
have  no  right  or  power  over  it." — Thomas  Jefferson. 

"The  great  spirit  has  told  me  that  the  land  is  not  to  be 
made  property.  The  earth  is  our  mother." — Black  Hawk. 

"Whilst  another  man  has  no  land  my  title  to  mine,  your 
title  to  yours,  is  at  once  vitiated." — Ralph  Waldo  Emerson. 

"From  this  one  great  fundamental  wrong  [landlordism] 
flow  want  and  misery  and  vice  and  shame." — Henry  George. 

"The  reserved  rights  of  the  people  to  the  rental  value  of 
land  must  be  construed  as  a  condition  to  every  deed." — United 
States  Supreme  Court. 

"There  is  no  foundation  in  nature,  or  in  natural  law,  why 
a  set  of  words  upon  parchment  should  convey  the  dominion  of 
land." — Sir  William  Blackstone. 

"The  ideal  taxation  lies  in  the  single  land  tax,  laid  upon 
the  rental  value  of  land,  independent  of  improvements." — New 
York  Times,  January  10,  1890. 

"The  land  of  every  country  is  the  common  property  of  the 
people  of  that  country,  because  the  creator  made  it  as  a  volun- 
tary gift  to  them." — Right  Rev.  Nulty,  Bishop  of  Meath. 

"To  deprive  others  of  their  right  to  the  use  of  the  earth  is 
to  commit  a  crime  only  inferior  in  wickedness  to  the  crime  of 
taking  away  their  lives  or  personal  liberties." — Herbert 
Spencer. 

"The  right  of  property,  originating  in  the  right  of  the  in- 
dividual to  himself,  is  the  only  full  and  complete  right  of 
property.  It  attaches  to  things  produced  by  labor,  but  can- 
not attach  to  things  created  by  God." — Henry  George. 

"He  who  is  capable  of  devising  a  system  by  which  the  ex- 
penses of  the  government  shall  be  limited  to  its  reasonable  ne- 
cessities and  its  burdens  distributed  so  that  they  shall  be 
fairly  or  justly  apportioned  among  all  our  people,  will  prove  a 
benefactor  to  his  race  and  deserve  the  gratitude  of  all."—  Gov. 
Boies,  in  inaugural  address  of  1892. 

"The  simple  yet  sovereign  remedy,  which  will  raise  wages, 
increase  the  earnings  of  capital,  extirpate  pauperism,  abolish 


An  Exposition  of  the  Single  Tax.  139 

poverty,  give  remunerative  employment  to  whosoever  wishes 
it,  afford  free  scope  to  human  powers,  lessen  crime,  elevate 
morals  and  taste  and  intelligence,  purify  government  and  carry 
civilization  to  yet  nobler  heights  is — to  appropriate  [ground] 
rent  by  taxation." — Henry  George. 

The  Single  Tax  Platform. 

The  following  platform  was  adopted  by  the  National  Con- 
ference of  the  Single  Tax  League  of  the  United  States  at 
Chicago,  August  30th,  1893: 

We  assert  as  our  fundamental  principle  the  self-evident 
truth  enunciated  in  the  Declaration  of  Independence  that  all 
men  are  created  equal  and  are  endowed  by  their  Creator  with 
certain  inalienable  rights. 

We  hold  that  all  men  are  equally  entitled  to  the  use  and 
enjoyment  of  what  God  has  created  and  of  what  is  gained  by 
the  general  growth  and  improvement  of  the  community  of 
which  they  are  a  part.  Therefore,  no  one  should  be  permitted 
to  hold  natural  opportunities  without  a  fair  return  to  all  for 
any  special  privilege  thus  accorded  to  him,  and  that  value 
which  the  growth  and  improvement  of  the  community  attach 
to  land  should  be  taken  for  the  use  of  the  community. 

We  hold  that  each  man  is  entitled  to  all  that  his  labor 
produces.  Therefore  no  tax  should  be  levied  on  the  products 
of  labor. 

To  carry  out  these  principles  we  are  in  favor  of  raising  all 
public  revenues  for  national,  State,  county  and  municipal  pur- 
poses by  a  single  tax  upon  land  values,  irrespective  of  improve- 
ments, and  of  the  abolition  of  all  forms  of  direct  and  indirect 
taxation. 

Since  in  all  our  States  we  now  levy  some  tax  on  the  value 
of  land,  the  single  tax  can  be  instituted  by  the  simple  and  easy 
way  of  abolishing,  one  after  another,  all  other  taxes  now  levied, 
and  commensurately  increasing  the  tax  on  land  values,  until 
we  draw  upon  that  one  source  for  all  expenses  of  government, 
the  revenue  being  divided  between  local  governments,  State 
governments  and  the  general  government,  as  the  revenue  from 
direct  taxes  is  now  divided  between  the  local  and  State  gov- 
ernments; or,  a  direct  assessment  being  made  by  the  general 
government  upon  the  States  and  paid  by  them  from  the  rev- 
enue collected  in  this  manner. 

The  single  tax  we  propose  is  not  a  tax  on"  land,  and  there- 
fore would  not  fall  on  the  use  of  |land  and  become  a  tax  on 
labor. 

It  is  a  tax,  not  on  land,  but  on  the  value  of  land.  Thus 
it  would  not  fall  on  all  land,  but  only  on  valuable  land,  and  on 


140  An  Exposition  of  the  Single  Tax. 

that  not  in  proportion  to  the  use  made  of  it,  but  in  proportion 
to  its  value — the  premium  which  the  user  of  land  must  pay  to 
the  owner,  either  in  purchase  money  or  rent,  for  permission  to 
use  valuable  land.  It  would  thus  be  a  tax,  not  on  the  use  and 
improvement  of  land,  but  on  the  ownership  of  land,  taking  what 
would  otherwise  go  to  the  owner  as  owner,  and  not  as  user. 

In  assessments  under  the  single  tax  all  values  created  by 
individual  use  or  improvement  would-be  excluded,  and  the  only 
value  taken  into  consideration  would  be  the  value  attaching  to 
the  bare  land  by  reason  of  neighborhood,  etc.,  to  be  determined 
by  impartial  periodical  assessments.  Thus  the  farmer  would 
have  no  more  taxes  to  pay  than  the  speculator  who  held  a  sim- 
ilar piece  of  land  idle,  and  the  man  who,  on  a  city  lot,  erected 
a  valuable  building  would  be  taxed  no  more  than  the  man  who 
held  a  similar  lot  vacant. 

The  single  tax,  in  short,  would  call  upon  men  to  contribute 
to  the  public  revenues,  not  in  proportion  to  what  they  produce 
or  accumulate,  but  in  proportion  to  the  value  of  the  natural 
opportunities  they  hold.  It  would  compel  them  to  pay  just  as 
much  for  holding  land  idle  as  for  putting  it  to  its  fullest  use. 

The  single  tax,  therefore,  would — 

1.  Take  the  weight  of  taxation  off  the  agricultural  dis- 
tricts, where  land  has  little  or  no  value  irrespective  of  improve- 
ments, and  put  it  on  towns  and  cities,  where  bare  land  rises  to 
a  value  of  millions  of  dollars  per  acre. 

2.  Dispense  with  a  multiplicity  of  taxes  and  a  horde  of 
taxgatherers,  simplify  government,  and  greatly  reduce  its  cost. 

3.  Dp   away  with  the  fraud,  corruption  and  gross  ine- 
quality inseparable  from  our  present  methods  of  taxation, 
which  allow  the  rich  to  escape  while  they  grind  the  poor. 
Land  cannot  be  hid  or  carried  off,  and  its  value  can  be  ascer- 
tained with  greater  ease  and  certainty  than  any  other. 

4.  Give  us,  with  all  the  world,  as  perfect  freedom  of  trade 
as  now  exists  between  the  States  of  the  Union,  thus  enabling 
our  people  to  share,  through  free  exchanges,  in  all  the  advan- 
tages which  nature  has  given  to  other  countries,  or  which  the 
peculiar  skill  of  other  peoples  has  enabled  them  to  attain.    It 
would  destroy  the  trusts,  monopolies  and  corruptions  which 
are  the  outgrowth  of  the  tariff.    It  would  do  away  with  the 
fines  and  penalties  now  levied  on  any  one  who  improves  a  farm, 
erects  a  house,  builds  a  machine,  or  in  any  way  adds  to  the 
general  stock  of  wealth.    It  would  leave  every  one  free  to  apply 
labor  01  expend  capital  in  production  or  exchange  without  fine 
or  restriction,  and  would  leave  to  each  the  full  product  of  his 
exertion 

5.  It  would,  on  the  other  hand,  by  taking  for  public  use 
that  value  that  attaches  to  land  by  reason  of  the  growth  and 
improvement  of  the  community,  make  the  holding  of  land  un- 


An  Exposition  of  the  Single  Tax.  141 

profitable  to  the  mere  owner  and  profitable  only  to  the  user. 
It  would  thus  make  it  unprofitable  for  speculators  and  monop- 
olists to  hold  natural  opportunities  unused  or  only  half  used, 
and  would  throw  open  to  labor  the  illimitable  field  of  employ- 
ment which  the  earth  offers  to  man.  It  would  thus  solve  the 
labor  problem,  do  away  with  involuntary  poverty,  raise  wages 
in  all  occupations  to  the  full  earnings  of  labor,  make  overpro- 
duction impossible  until  all  human  wants  are  satisfied,  render 
labor-saving  inventions  a  blessing  to  all,  and  cause  such  an 
enormous  production  and  such  an  equitable  distribution  of 
wealth  as  would  give  to  all  comfort,  leisure,  and  participation 
in  the  advantages  of  an  advancing  civilization. 

In  securing  to  each  individual  his  equal  right  to  the  use 
of  the  earth  it  is  also  a  proper  function  of  society  to  maintain 
and  control  all  public  ways  for  the  transportation  of  persons 
and  property  and  the  transmission  of  intelligence,  and  also  to 
maintain  and  control  all  public  ways  in  cities  for  furnishing 
water,  gas  and  all  other  things  that  necessarily  require  the  use 
of  such  common  ways. 

A  previous  platform  contained  the  following  in  place  of 
the  last  paragraph  above  —  and  many  prominent  single-taxera 
prefer  this  form: 

With  respect  to  monopolies  other  than  the  monopoly  of 
land,  we  hold  that  where  free  competition  becomes  impossible, 
as  in  telegraphs,  railroads,  water  and  gas  supplies,  etc.,  such 
business  becomes  a  proper  social  function  which  should  be 
controlled  and  managed  by  and  for  the  whole  people  con- 
cerned, through  their  proper  government,  local,  State  or  na- 
tional, as  may  be. 


What  the  Referendum  Will  Do. 

It  will  simplify  laws.  It  will  simplify  government.  It 
will  kill  monopoly.  It  will  purify  the  ballot.  It  will  sup- 
plant violence.  It  will  broaden  manhood.  It  will  prevent 
revolution.  It  will  make  people  think.  It  will  accelerate 
progress.  It  will  banish  sectionalism.  It  will  sever  party 
bondage.  It  will  abolish  special  privileges.  It  will  wipe 
out  plutocratic  dictation.  It  will  reduce  taxation  to  neces- 
sity. It  will  prevent  the  bribery  of  law-makers.  It  will 
establish  home  rule  in  all  municipalities.  It  will  restore  to 
the  people  their  natural  rights.  It  will  aid  honest  repre- 
sentatives in  serving  the  people-  It  will  give  us  a  government 
of  the  people,  by  the  people,  for  the  people,  on  a  foundation 
of  equal  and  exact  justice  to  all.  —  John  A.  Wayland, 


In  "No  alms  I  ask;  give  me  my  task! 

Here  are  the  arm,  the  leg, 
The  strength,  the  sinews  of  a  man, 
To  work,  and  not  to  beg." 

— TOM  HOOD  (Lay  of  the  Laborer}. 


CO-OPERATION. 


JN  the  course  of  a  series  of  lectures  on  Socialism  and  kindred 
*•  subjects  recently  delivered  in  St.  Louis,  the  Rev.  W.  W. 
Boyd,  of  the  Second  Baptist  Church  of  that  city,  presented 
the  results  of  a  careful  investigation  of  the  subject  of  Co- 
operation. The  statistics  of  distributive  co-operation  in  Great 
Britain  make  a  most  interesting  exhibit.  The  English  "whole- 
sale" annual  business  is  now  $50,000,000  a  year.  The  total  of 
the  reporting  co-operative  stores  is  8250,000,000;  the  profits, 
in  excess  of  interest,  $25,000,000;  the  membership,  1,400,000. 
The  total  trade  of  co-operative  stores  in  Great  Britain  from 
1861  to  1890,  inclusive,  was  $2,743,436,440,  and  the  profits  in 
excess  of  "interest,  $233,059,495. 

In  the  United  States  the  Puritan  settlements  early  gave  a 
practical  training  in  the  spirit  of  co-operation,  and  in  the  first 
industry,  that  of  the  fisheries,  the  form  of  co-operation  followed 
which  has  continued,  especially  in  Maine,  to  the  present. 
Brook  Farm,  Hopedale  and  other  associations  in  the  decade  of 
1840-50  were  communistic  as  well  as  co-operative,  and  therein 
lay  their  weakness.  The  Workmen's  Protective  Union,  1850, 
the  Patrons  of  Industry  (or  the  Grange)  and  similar  organiza- 
tions, though  co-operative,  failed  because  they  did  not  grasp 
the  true  principle  of  co-operation.  Yet  out  of  the  experience) 
agitation  and  education  of  those  forty  years  the  principles  of 
true  co-operation  are  beginning  to  be  understood  and  put  in 
practice. 

The  popular  notion  of  a  co-operative  store  has  been  for  a 
few  persons  to  subscribe  a  small  capital,  buy  at  the  lowest 
wholesale  prices  a  stock  of  goods  and  sell  to  the  members 
at  cost  and  perhaps  on  credit,  thus  cutting  the  prices  of  retail 
traders.  The  failure  of  so  many  so-called  co-operative  stores 

142 


Co-operation.  j.*3 

in  this  country  is  due  to  this  total  misconception  of  what  co- 
operation is.  The  same  thing  occurred  in  England  for  half  a 
century,  until  in  1844  the  Rochdale  weavers  discovered  the 
true  principle  that  must  lie  at  the  basis  of  all  successful  co- 
operative enterprise — namely,  the  feeding  of  co-operation  on 
its  profits.  The  principal  features  of  the  Rochdale  system, 
which  has  proved  successful  wherever  adopted,  are  these: 
Each  member  of  the  co-operative  society  is  limited  to  one  vote 
in  choosing  directors  to  conduct  the  business.  Only  goods  of 
standard  quality  and  in  constant  demand  are  bought.  All 
goods  are  sold  for  cash,  no  credit  being  given,  at  the  regular 
retail  prices.  A  record  is  kept  of  purchases,  and  the  profitsf 
after  deducting  interest  and  a  certain  portion  for  the  reserve 
funds,  are  divided  quarterly,  not  on  the  shares,  as  in  a  joint 
stock  company,  but  on  the  amount  of  purchases  each  has 
made.  The  dividend,  or  rebate,  received  by  each  purchaser  is 
placed  to  his  credit  against  further  shares  of  the  capital  stock, 
or  paid  to  him  in  cash,  as  he  desires.  Thus  the  savings  are 
constantly  invested  in  the  business,  and  it  is  this  feeding  on 
profits  that  gives  co-operation  capital  and  stability. 

In  co-operative  production  we  find  that  cheese  factories 
and  creameries  for  the  manufacture  of  butter  are  an  estab- 
lished success.  Of  150  creameries  in  New  England,  80  per 
cent,  are  co-operative.  In  the  Central  and  Western  States  one- 
fourth  of  the  whole  number  are  so.  In  the  Northwestern  and 
Middle  States  one-half  of  the  cheese  factories  are  co-operative. 
Sixty  per  cent,  of  the  cheese  made  in  factories  in  the  United 
States  is  the  product  of  co-operative  effort.  The  significance 
of  these  statements  is  seen  if  we  add  that  the  dairy  production 
of  the  United  States  is  annually  610,000  tons,  or  about  one- 
third  of  the  world's  product,  and  that  our  exports  for  1889-92, 
inclusive,  were  75,487,380  pounds  of  butter  and  344,609,978 
pounds  of  cheese,  a  total  value  of  more  than  839,000,000.  At 
least  one-half  of  this  value  was  the  result  of  co-operation. 

Co-operative  manufacturing  is  the  most  difficult  form  of 
co-operation,  yet  Mr.  Boyd  has  gathered  the  statistics  of  forty 
such  establishments  in  this  country,  the  managers  of  which 
speak  of  the  system  in  praise. 


144  Co-operation. 

Building  and  Loan  Associations. 

Originating  in  Philadelphia  in  1831,  building  and  loan 
associations  are  now  to  be  found  in  most  of  the  States.  In 
Pennsylvania,  it  is  said,  the  people  have  saved  through  them 
$60,000,000,  and  nearly  100,000  homes  in  that  city  have  thus 
been  paid  for.  Commissioner  Wright  says  that,  though  the 
average  age  of  all  these  associations  is  but  6.2  years,  there  are 
in  the  United  States  5,838  of  them,  with  1,745,725  shareholders, 
having  net  assets  of  $450,667,594.  The  total  profits  have  been 
180,664,116.  He  estimates  that  by  this  agency  there  bave  been 
built  in  this  country  nearly  400,000  homes.  Bradstreet's  re- 
ports that  the  aggregate  resources  of  these  co-operative  savings 
associations  of  the  country  are  nearly  60  per  cent,  of  the  entire 
assets  of  all  State,  savings,  loan  and  trust  companies  and 
private  banks  and  bankers  from  whom  reports  were  received 
in  1890.  Their  deposits  were  less  than  10  per  cent,  below  those 
of  the  national  banks  and  were  more  than  twice  as  large  as  the 
total  stock  of  the  national  banks. 

On  this  showing  Mr.  Boyd  comes  to  the  conclusion  that  in 
building  and  loan  associations  co-operation  has  won  its  most 
signal  euccess.  And  yet  they  are  not  an  unmixed  blessing. 
The  writer  believes  that  there  are  two  sides  to  this  question — 
in  fact,  that  these  associations  do  not  at  all  represent  the  true 
principles  of  co-operation.  And  the  reason  is  that  not  all  the 
members  borrow,  and  those  who  do  not  have  a  decided  ad- 
vantage over  those  who  do,  in  that  they  get  the  lion's  share  of 
the  profits  accruing  from  the  usurious  rates  of  interest  which 
prevail.  The  nominal  rate  of  interest  is  generally  7  per  cent., 
but  as  a  usual  thing  money  loaned  by  building  and  loan  asso- 
ciations is  put  up  at  auction,  the  member  bidding  the  largest 
premium  getting  the  loan.  The  premium  is  never  less  than  20 
per  cent.,  often  as  high  as  35  per  cent. — and  this  is  always  de- 
ducted from  the  loan.  Thus  a  borrower  paying  interest,  on, 
say,  $2,000,  may  not  have  received  in  reality  more  than  $1,300, 
at  most  $1,600.  If  $1,300,  even  if  the  nominal  rate  of  interest  is 
only  6  per  cent.,  he  really  pays  at  the  rate  of  over  9  per  cent. 
If  the  nominal  rate  is  7  per  cent.,  he  really  pays  nearly  11  per 
cent.  Under  the  most  favorable  circumstances  the  interest 


Co-operation.  145 

will  be  at  least  one-third  higher  than  prevailing  rates.  Many 
business  men,  realizing  this,  invest  largely  in  the  stock  of 
building  and  loan  associations,  but  would  not  think  of  borrow- 
ing from  them.  When  they  do  borrow  they  make  a  straight 
loan  elsewhere,  timing  the  loan  so  that  it  comes  due  after 
their  stock  matures.  <%, 

HOW  TO  CO- OPERA TE. 

ONE  of  the  greatest,  because  one  of  the  most  active  and  suc- 
cessful and,  above  all,  one  of  the  most  unselfish  workers  in 
the  cause  of  Reform  is  John  A .  Wayland,  formerly  of  Green- 
field, Ind.,  and  now  of  Tennessee  City,  Tenn.,  where  he  is  the 
guiding  spirit  of  the  flourishing  co-operative  colony  of  Ruskin. 
His  paper,  The  Coming  Nation,  all  of  the  profits  of  which  he 
devotes  to  his  philanthropic  enterprise,  is  one  of  the  brightest 
examples  of  originality  in  journalism.  No  man  living  is  better 
qualified  to  speak  on  the  subject  of  co-operation.  He  says: 

I  may  not  Jay  claim  to  either  the  age  or  wisdom  to  advise 
my  brother  workers  what  to  do,  but  if  you  will  consider  some 
of  my  suggestions  relative  to  your  actions  and  surroundings, 
and  talk  them  over  among  yourselves,  I  am  sure  you  will  be 
able  to  find  the  world  brighter  to  you.  You  seldom,  if  ever, 
give  any  serious  thought  to  bettering  your  condition  except  by 
hoping  for  better  wages.  Your  ideals  begin  and  end  with 
"wages,"  and  so  long  as  that  be  true  there  is  no  possibility  of 
your  condition  being  bettered.  You  mistrust  your  fellow 
workmen,  never  give  or  receive  their  confidence,  and  are  afraid 
of  trying  to  help  yourselves  by  mutual  exertion.  You  may 
say  you  also  mistrust  the  employing  classes,  but  you  act  on 
their  advice  and  suggestion  every  time.  You  say  that  one  of 
you  is  dishonest,  another  lazy,  and  so  on,  and  they  have  a  like 
opinion  of  you;  when,  if  you  were  to  go  to  them  as  a  brother, 
take  them  into  your  confidence  and  unfold  to  them  some  plan 
you  have  thought  out  honestly  of  making  more  wealth,  or  retain- 
ing that  you  do  create,  I  am  sure  under  many  ragged  coats  you 
will  find  true  hearts  willing  to  help  you,  and  minds  capable  of 
great  and  noble  deeds.  It  only  lacks  this  expression  of  confi- 
dence to  bring  out  their  nobility  and  yours  also.  Whoever 
speaks  to  a  workman  about  bettering  his  condition  except  on 
terms  that  take  the  larger  share  while  the  laborer  takes  all 
the  chances  of  loss?  No  one  will  help  you  on  really  just  terms. 
You  must  learn  to  help  yourselves.  I  never  felt  this  more 
than  while  reading  how  thirteen  poor  weavers  and  shoemakers 
in  Rochdale,  England,  met  and  talked  over  how  to  better  their 


146  Co-operation. 

condition.  They  did  not  have  a  shilling,  but  they  laid  away 
two-pence  (four  cents)  a  week  from  their  scanty  wages  and  be- 
gan to  create  a  fund.  In  time  they  got  a  few  more  with  them. 
At  the  end  of  a  year  they  had  £28.  They  bought  coffee, 
sugar,  tea  and  oatmeal  with  it,  placed  it  in  a  room  of  one 
of  them  and  sold  it  to  themselves  at  the  retail  price,  saying  the 
dealer's  profit.  They  did  this  at  night,  that  they  might  not 
lose  time.  This  grew,  and  new  members  were  admitted,  but  it 
was  seven  years  before  the  store  was  finally  opened  during  the 
day.  This  was  the  beginning  of  a  system  that  has  to-day 
2,000  retail  stores,  great  warehouses,  factories  and  workshops, 
ships,  all  owned  by  the  very  workers  who  are  employed  in 
these  institutions,  each  having  only  a  small  share  of  stock,  but 
dividing  the  profits  among  them.  They  do  a  business  of  hun- 
dreds of  millions  of  dollars  annually.  It  has  not  only  placed 
them  above  the  power  of  British  capitalists  to  make  profits  out 
of  their  toil,  but  it  has  done  more.  It  has  developed  some  of 
the  noblest,  purest  characters  in  England.  It  has  elevated 
thousands  of  working  people  from  degraded  conditions  to  self- 
reliant  men  and  women.  It  is  an  example  worthy  to  be  fol- 
lowed by  all  working  people.  Are  you  Americans  less  noble? 
Are  you  less  independent?  Have  you  the  mettle  to  meet  and 
overcome  your  ills?  Are  you  capable  of  recognizing  some  of 
the  good  in  you  as  you  do  some  of  the  bad  in  you?  Are  you 
worthy  of  better  treatment  than  you  are  receiving?  If  you 
are,  go  to  work.  Take  each  other  into  frankest  confidence, 
talk  over  plans,  and  when  you  have  carefully  considered  and 
decided  on  some  course,  pursue  it  with  a  determination  and 
vigor  that  means  success.  If  some  drop  by  the  wayside,  stop 
not.  Keep  your  eyes  on  the  goal,  your  heart  true  to  truth, 
and  all  the  powers  of  capitalism  and  its  combines  will  give 
way  before  you.  You  have  never  tried  to  help  yourselves,  and 
are  therefore  helpless.  Every  obstacle  met  and  overcome  will 
make  you  stronger.  There  is  no  victory  where  there,.is  noth- 
ing to  conquer. 

You  say  you  can  do  nothing  for  the  lack  of  ready  cash? 
More  helpless  than  a  Hottentot,  who  don't  use  money.  Well, 
I  have  been  studying  how  to  help  you  out  of  your  troubles,  by 
using  the  means  you  have  learned  something  about.  If  you 
were  not  so  ignorantly  selfish  and  suspicious  of  each  other, 
you  would  not  need  to  adopt  such  methods,  but  as  you  are,  I 
will  lay  down  a  plan  that  will  give  you  all  the  capital  you  want 
without  debt  or  interest,  and  which  will  be  strictly  in  conform- 
ity with  the  letter  and  spirit  of  the  laws. 

Let  a  dozen  or  twenty  men  and  women  incorporate  a  com- 
pany under  State  laws  to  buy  and  sell  real  estate,  build 
houses,  and  engage  in  merchandising  and  manufacturing,  as 
theincorporators  may  desire.  Capitalize  say  at  $50,000,  diyided 


Co-operation.  147 

into  5,000  shares  of  810  each.  Have  the  stock  certificates  neat- 
ly engraved,  with  blank  spaces  for  name  of  purchaser  and  for 
signing  up  by  the  officers,  and  have  them  about  the  size  of  a 
bank  note.  Issue  with  each  certificate,  which  should  represent 
but  one  share,  a  blank  proxy,  or  print  it  on  the  back  and  have 
the  purchaser  sign  it  and  also  sign  his  name  on  the  back  in 
the  blank  for  transfer.  Then  each  share  will  be  the  property 
of  the  holder.  Then  you  have  5,000  810  certificates  of  stock, 
which  will  act  as  so  much  money  if  handled  in  the  following 
manner:  Pay  no  officer  any  salary,  so  purchasers  will  know 
that  the  assets  will  not  be  eaten  up — that  will  pay  you  in  the 
future.  Then  find  some  man  who  has  a  non-productive  vacant 
lot  and  who  will  take  stock  for  it.  Then  find  some  man  who 
has  stone  that  he  will  give  for  stock,  using  time  that  he  would 
otherwise  be  idle.  Pay  the  quarrymen,  the  masons,  the  brick- 
makers,  the  carpenters,  the  plasterers,  the  lime-makers,  etc.. 
allowing  each  to  use  material  and  labor  that  would  not  be  em- 
ployed, and  soon  you  will  have  a  house  ready,  all  done  by  time 
that  would  have  otherwise  been  idle  and  forever  lost.  When 
the  house  is  ready  rent  it  to  one  of  the  stockholders,  who  will 
make  the  best  tenant,  for  he  will  have  an  interest  in  the  house 
as  a  partial  owner.  Then  repeat  it,  and  soon  the  rent  of  the 
houses  will  pay  an  interest  on  the  stock,  for  there  will  be  no 
more  stock  issued  than  is  actually  represented  by  the  houses. 
Whenever  you  can  pay  a  dividend  of  3  per  cent,  on  these 
shares  they  will  pass  at  par  and  you  will  find  them  circulating 
from  hand  to  hand  like  so  many  $10  bills,  and  you  will  have  an 
abundance  of  money  to  transact  your  business.  You  can 
build  a  store  building  and  gradually  accumulate  a  stock  of 
goods,  and  each  stockholder  will  patronize  that  store  because 
he  is  an  owner  in  it.  You  can  also  erect  factories  and  employ 
the  stockholders.  The  more  people  you  can  get  to  take  this 
stock  for  labor  or  material  the  stronger  your  corporation  will 
be,  and  the  more  stable  will  be  the  stock.  By  employing  none 
but  stockholders,  who  can  thus  find  a  place  to  create  wealth  on 
their  idle  days,  you  will  compel  in  a  measure  all  the  citizens  to  be 
stockholders.  Thus  you  can  transform  all  your  idle  labor,  idle 
land  and  idle  materials  into  use  and  profit,  and  go  on  to  an  un- 
limited extent,  and  by  paying  3  per  cent,  dividends  (to  your- 
selves) you  will  not  grow  poorer,  as  would  be  the  case  if  the 
interest  went  to  New  York.  Besides,  the  money  shark  could 
not  get  possession  of  that  stock  without  giving  value  received. 
As  it  now  is,  he  prints  stock  that  costs  him  nothing  and  you 
pay  him  a  large  interest  on  that.  When  you  have  shown  that 
you  are  entitled  to  confidence  by  your  management,  you  can, 
by  joining  with  other  such  companies,  build  great  factories,  or 
even  railroads. 


148  Co-operation. 

Now  don't  sit  around  like  children  Baying  you  can  do  noth- 
ing,but  go  to  work  and  use  these  methods  which  capitalists  use 
to  rob  you.  They  can  be  operated  anywhere,  but  especially  in 
email  communities  where  land  is  cheap  and  where  there  is 
building  material  handy. 

The  modus  operandi  of  beginning  and  operating  a  store, 
on  the  principles  which  have  every  time  been  successful,  I  will 
outline  for  you  as  follows:  Get  many  working  people  to  sub- 
scribe $50  for  one  share  of  stock,  to  be  paid,  if  cash  down  is 
impossible,  say  $5  at  time  of  subscribing  and  $1  per  week 
thereafter  until  the  stock  is  fully  paid  up.  Great  care  should 
be  taken  to  get  no  quarrelsome  or  vicious  members.  Much 
will  depend  on  that.  New  members  should  be  proposed  and 
voted  on  by  the  society  before  admission.  As  soon  as  capital 
enough  is  in  hand,  rent  a  building  and  lay  in  a  stock  of  goods. 
Get  the  best  and  most  sincere  co-operator  as  salesman.  Neither 
buy  nor  sell  one  cent's  worth  on  credit.  Keep  an  accurate  set 
of  books  showing  purchases  of  stock  and  sales.  Have  meet- 
ings of  all  stockholders  quarterly,  at  which  officers  shall  make 
their  report,  in  which  shall  be  specified  the  amount  of  funds 
and  value  of  stock  possessed  by  the  company.  After  the  rent, 
help,  etc.,  are  paid,  the  profits  should  be  divided  as  follows: 
5  per  cent,  on  all  shares  paid  up  previous  to  the  quarterly 
meeting;  the  remainder  to  be  divided  amongst  the  members 
in  proportion  to  the  amount  of  their  purchases  at  the  store 
during  the  quarter.  This  is  done  by  giving  each  member  a 
book  in  which  the  amount  of  each  purchase  is  entered,  or  by 
having  metal  or  printed  chips  of  5c,  lOc,  25c  and  $1,  and  giving 
one  of  them  with  each  purchase  equal  to  the  amount.  The 
bookkeeper  should  aslo  tally  these.  Thus  the  total  sales,  if 
nobody  but  members  purchased,  would  equal  the  number  of 
these  checks  or  books  brought  in  on  the  last  day  of  the  quarter. 
The  cash  and  these  chips  or  books  must  tally.  Sales  to  out- 
eiders  would  swell  the  profits  to  shareholders.  By  this  means 
the  co-operators  buy  goods  at  wholesale  prices,  plus  actual  ex- 
pense of  conducting  business.  Fifty  dollars  to  a  family  will 
furnish  all  the  capital  needed  in  business.  If  shareholders  do 
not  wish  to  draw  their  profits  at  the  end  of  the  quarter,  or  any 
part  of  it,  and  more  capital  can  be  used  to  advantage,  pay 
them  4  per  cent,  on  such  sums,  and  the  company  thus  becomes 
a  savings  bank,  as  all  stores  in  England  are.  In  this  country, 
the  company  could  be  organized  as  a  stock  company  or  under 
the  building  association  laws,  as  thought  best,  but  the  stock 
should  be  so  limited  as  to  allow  but  one  or  two  shares  to  one 
person,  and  the  company  should  always  stand  ready  to  pay  the 
face  value  for  any  share  of  stock,  and  thus  keep  control  of  it 
in  desirable  hands.  All  instances  where  capitalists,  except 
such  as  were  sincere  co-operators,  were  permitted  to  have  a 


Co-operation.  1*9 

nand  in  the  management,  failed  of  good  results.  It  is  desir- 
able to  own  your  own  store-building,  and  this  can  easily  be 
done  in  America,  where  land  is  cheap  and  titles  easy  of  trans- 
fer. Mechanics  among  co-operators  can  easily  build  in  days 
of  idleness,  and  material  can  be  purchased  by  loans  at  4  per 
cent,  as  above  specified.  The  business  should  be  under  the 
control  of  a  large  board  of  directors.  By-laws  to  bring  about 
these  results  can  be  easily  drafted.  I  have  outlined  above 
enough  to  show  you  how  to  proceed.  Tracts  showing  work- 
ing people  the  advantages  to  be  derived  by  co-operat\on 
should  be  circulated,  and  that  will  stimulate  interest.  When 
several  stores  have  been  started,  by  acting  together  in  pur- 
chases, great  benefits  can  be  obtained  that  even  large  retail 
stores  cannot  have.  If  twenty  stores  were  in  operation  they 
could  import  coffee,  sugar  and  many  articles  and  get  them 
cheaper  than  jobber  and  wholesaler,  whose  profits  are  now 
added.  The  Rochdale  stores  do  this. 


"THOU,  too,  sail  on,  O  Ship  of  State! 
Sail  on,  O  Union,  strong  and  great! 
Humanity,  with  all  its  fears, 
With  all  the  hopes  of  future  years, 
Is  hanging  breathless  on  thy  fate! 
We  know  what  Master  laid  thy  keel, 
What  Workman  wrought  thy  ribs  of  steel, 
Who  made  each  mast,  and  sail,  and  rope, 
What  anvils  rang,  what  hammers  beat, 
In  what  a  forge  and  what  a  heat 
Were  shaped  the  anchors  of  thy  hope! 
Fear  not  each  sudden  sound  and  shock, 
'Tis  of  the  wave  and  not  the  rock; 
'Tis  but  the  flapping  of  the  sail, 
And  not  a  rent  made  by  the  gale! 
In  spite  of  rock  and  tempest's  roar, 
In  spite  of  false  lights  on  the  shore, 
Sail  on,  nor  fear  to  breast  the  sea! 
Our  hearts,  our  hopes,  are  all  with  thee, 
Our  hearts,  our  hopes,  our  prayers,  our  tears, 
Our  faith  triumphant  o'er  our  fears, 
Are  all  with  thee,  —  are  all  with  thee!" 

—  Longfellow. 

"!F  I  were  a  young  man,  I  should  ally  myself  with  some 
high  and  at  present  unpopular  cause,  and  devote  my  every 
effort  to  accomplishing  its  success."  —  John  <?.  Whittier. 


|n  "No  people  can  be  self-governing  who  are  denied  the  right 
to  vote  ' yes"1  or  'no1  on  every  law  by  which  they  are  to  be 
governed" 


DIRECT  LEGISLATION. 

•^• 

The  Initiative  and  Referendum. 

'pHE  Initiative  gives  the  people  the  power  to  compel  the 
•*•  legislature  to  put  in  form  all  such  laws  as  they  may  initi- 
ate or  demand  by  a  preliminary  vote. 

The  Referendum  permits  all  legislative  enactments  to  be 
referred  to  the  people  for  their  ratification  by  vote  before  they 
become  laws. 

The  Imperative  Mandate  gives  the  people  the  right  to  vote 
out  of  office  at  any  time  men  who  fail  to  serve  the  public  or 
who  are  untrue  to  their  pledges. 

Proportional  Representation  secures  the  representation 
of  all  parties  in  proportion  to  their  numerical  strength. 

Representative  Government  means  government  by  repre- 
sentatives elected  by  the  people,  but  independent  of  the  people 
after  election  and  empowered  to  ignore  or  overrule  the  people's 
will. 

Popular  Government,  or  democracy,  means  government 
of,  for  and  by  the  people.  It  will  be  possible  only  when  all 
officeholders  are  honest  or  when  the  people's  representatives 
are  made  subject  to  the  people's  will  by  the  adoption  of  the 
referendum. 

There  is  a  radical  difference  between  a  democracy  and  a 
representative  government.  Whenever  a  people  are  qualified 
for  self-government  no  power  on  earth  can  prevent  them  from 
exercising  that  right.  The  American  people  have  been  too 
busy  "making  money"  to  study  their  real  economic  needs,  and 
the  result  is  that  irresponsible  demagogues  have  made  laws 
which  have  plunged  the  nation  into  almost  hopeless  debt,  par- 
alyzed its  business  and  impoverished  most  of  the  people.  The 
voters  have  several  times  of  late  risen  in  their  wrath  and 

150 


Direct  Legislation.  151 

"  turned  the  rascals  out,"  but  it  was  only  to  elect  another  set 
of  rascals,  of  different  political  complexion,  perhaps,  but  equally 
dishonest  and  equally  irresponsible.  The  so-called  "landslides" 
in  recent  elections,  however,  indicate  that  the  people  have 
begun  to  think.  Soon  they  will  realize  that  they  can  control 
their  own  government  only  by  keeping  the  legislation  in  their 
own  hands — that  they  must  not  delegate  their  sovereignty  to 
representatives  or  servants,  by  whatever  name  they  may  be 
known.  It  is  only  by  means  of  the  initiative  and  the  referen- 
dum that  the  people  can  maintain  their  supremacy.  The  gen- 
eral adoption  of  this  system  is  the  next  step  in  the  world's 
progress.  The  initiative  and  referendum  will  take  the  element 
of  partisanship  out  of  the  settlement  of  economic  questions, 
and  this  alone  is  sufficient  reason  why  it  should  be  adopted. 
Suppose  the  question  of  tariff  were  submitted  to  the  people  to 
vote  on.  Members  of  all  parties  would  vote  for  it  and  against 
it,  and  the  majority  would  decide.  It  would  become  a  ques- 
tion of  economics,  not  a  partisan  issue,  and  would  be  settled 
on  its  merits.  The  same  with  the  free  coinage  of  silver,  paper 
money,  public  ownership  of  railroads,  prohibition,  and  every 
other  great  question  which  the  gold  political  parties  have 
straddled  or  evaded. 

But  the  principal  advantage  of  the  referendum  is  that  it 
would  do  away  entirely  with  the  lobby — "the  third  house." 
There  would  be  no  inducement  for  any  one  to  bribe  the  law- 
makers. They  might  sell  their  individual  votes,  but  these 
would  be  worthless,  as  only  the  people  could  "deliver  the 
goods."  The  people  would  be  quick  to  see  the  value  of  the 
franchises  and  privileges  which  are  now  being  practically 
given  away,  to  be  used  by  corporations  to  still  further 
enslave  the  masses. 

Switzerland  is  the  home  of  the  referendum.  It  is  com- 
monly believed  that  that  republic  has  existed  for  six  hundred 
years.  The  fact,  however,  is  that  it  is  the  youngest  of  repub- 
lics. The  characteristic  features  of  the  government,  those 
which  make  it  a  republic  in  fact  as  well  as  in  name,  were  insti- 
tuted by  the  present  generation.  It  is  the  only  country  in  the 
world  to-day  which  has  overthrown  its  plutocracy  and  which 


152  Direct  Legislation. 

has  made  it  impossible  for  corrupt  politicians  to  rule  the  peo- 
ple through  the  representative  system.  To  the  principle  of 
direct  legislation,  as  carried  out  by  the  initiative  and  referen- 
dum, must  be  ascribed  the  happy  conditions  which  surround 
its  politics/  Mr.  W.  D.  McCrackan,  author  of  "The  Rise  of  the 
Swiss  Republic,"  who  has  made  a  special  study  of  the  subject, 
has  published  in  the  Arena  his  observations  of  Swiss  politics. 
He  finds  that,  as  a  result  of  the  referendum,  jobbery  and 
extravagance  are  unknown  and  that  politics,  as  there  is  no 
money  in  it,  has  ceased  to  be  a  trade.  Office-holders  are  taken 
from  the  ranks  of  citizenship  and  are  invariably  chosen 
because  of  their  fitness  for  the  work.  The  people  take  an 
intelligent  interest  in  the  legislation,  local  and  federal,  and  are 
fully  imbued  with  a  sense  of  their  political  responsibilities. 
The  Westminster  Review,  February,  1888,  speaking  of  the 
referendum,  expresses  this  opinion : 

"  The  bulk  of  the  people  move  more  slowly  than  their  rep- 
resentatives, are  more  cautious  in  adopting  new  and  trying 
legislative  experiments  and  have  a  tendency  to  reject  proposi- 
tions submitted  to  them  for  the  first  time.  . .  .  The  issue  which 
is  presented  to  the  sovereign  people  is  invariably  and  necessa- 
rily reduced  to  its  simplest  expression  and  so  placed  before 
them  as  to  be  capable  of  an  affirmative  or  negative  answer.  In 
practice,  therefore,  the  discussion  of  details  is  left  to  the  rep- 
resentative assemblies,  while  the  public  express  approval  or 
disapproval  of  the  general  principle  or  policy  embraced  in  the 
proposed  measure.  Public  attention  being  confined  to  the 
issue,  leaders  are  nothing.  Collective  wisdom  judges  of  mer- 
its." 

In  some  of  the  cantons  of  Switzerland  the  referendum  has 
been  in  practice  since  the  sixteenth  century.  As  it  is  now 
employed  it  was  adopted  by  the  canton  of  St.  Gallon  in  1830 
and  in  1848  it  was  incorporated  in  the  Swiss  federal  constitu- 
tion. It  has  been  so  extended  since  then  that  it  is  now  in 
operation  in  all  the  Swiss  cantons  except  Freiburg. 

According  to  the  Swiss  constitution  all  amendments  thereto 
must  be  ratified  by  the  Swiss  electors  before  they  become 
effective.  Other  measures,  like  ordinary  enactments,  must  be 
submitted  to  a  popular  vote  if  a  demand  is  made  for  such 
submission,  written  ninety  days  after  their  publication.  This 


Direct  Legislation.  153 

demand  must  be  made  by  30,000  voters  or  by  the  government 
of  eight  of  the  nineteen  entire  and  six  half  cantons.  In  Swit- 
zerland the  referendum  has  proved  to  be  entirely  satisfactory 
as  a  check  upon  hasty  or  class  legislation. 

As  to  the  practical  working  of  the  referendum  in  Switzer- 
land Albert  Bushnell  Hart  says  : 

"A  judgment  of  the  referendum  must  be  based  on  the 
working  of  the  electoral  machinery,  on  the  interest  shown  by 
the  voters,  and  on  the  popular  discrimination  between  good 
and  bad  measures.  The  process  of  invoking  and  voting  on  a 
referendum  is  simple  and  easily  worked,  if  not  used  too  often 
Although  the  assembly  has,  in  urgent  cases,  the  constitutional 
right  to  set  a  resolution  in  force  at  once,  it  always  allows  from 
three  to  eight  months'  delay  so  as  to  permit  the  opponents  of 
a  measure  to  lodge  their  protests  against  it.  Voluntary  com 
mittees  take  charge  of  the  movement,  and,  if  a  law  is  unpopu 
lar,  little  difficulty  is  found  in  getting  together  the  necessary 
30,000  or  50,000  signatures.  Only  thrice  has  the  effort  failed 
when  made.  When,  as  in  1882,  the  signatures  run  up  to  180,000 
the  labor  is  severe,  for  every  signature  is  examined  by  the 
national  executive  to  see  whether  it  is  attested  as  the  sign 
manual  of  a  voter ;  sometimes,  in  an  interested  canton,  as 
many  as  70  per  cent,  of  the  voters  have  signed  the  demand 
The  system  undoubtedly  leads  to  public  discussion  ;  newspa 
pers  criticise;  addresses  and  counter  addresses  are  issued;  can- 
tonal councils  publicly  advise  voters,  and  of  late  the  federal 
assembly  sends  out  manifestoes  against  pending  initiatives. 
The  federal  executive  council  distributes  to  the  cantons  enough 
copies  of  the  proposed  measure  so  that  one  may  be  given  to 
each  voter.  The  count  of  the  votes  is  made  by  the  executive 
council  as  a  returning  board.  Inasmuch  as  the  Swiss  are 
unfamiliar  with  election  frauds,  and  there  has  been  but  one 
very  close  vote  in  the  national  referenda,  the  count  is  not  diffi- 
cult, but  there  are  always  irregularities,  especially  where  more 
than  one  question  is  presented  to  the  voters  at  the  same  time. 

"  What  is  the  effect  of  the  popular  votes  thus  carried  out? 
The  following  table,  based  on  official  documents,  shows  the 
results  for  the  twenty  years  1875-1891: 

Passed,  Rejected.  Total 

1.  Constitutional  amendments  proposed 
by  the  assembly  ^referendum  obliga- 
tory)        16  7 

2.  Constitutional  amendments  proposed 
by  popular   initiative  (50,000   signa- 
tures)        2  1  *4 

3.  Laws  passed  by  the  assembly  (refer- 


154  Direct  Legislation. 

endum  demanded  by  30,000) 14  6  20 

17  13  31 

"Making  allowances  for  cases  where  more  than  one  ques- 
tion has  been  submitted  at  the  same  time,  there  have  been 
twenty-four  popular  votes  in  twenty  years.  In  addition,  most 
of  the  cantons  have  their  own  local  referenda;  in  Zurich,  for 
example,  in  these  twenty  years,  more  than  one  hundred  other 
questions  have  been  placed  before  the  sovereign  people.  These 
numbers  are  large  in  themselves,  but  surprising  in  proportion 
to  the  total  legislation.  Out  of  158  general  acts  passed  by  the 
federal  assembly  from  1874  to  1892,  twenty-seven  were  sub- 
jected to  the  referendum;  that  is,  about  one-sixth  are  reviewed 
and  about  one-tenth  are  reversed.  Constitutional  amendments 
usually  get  through  sooner  or  later,  but  more  than  two-thirds 
of  the  statutes  attacked  are  annulled." 

In  his  valuable  book,  "Direct  Legislation,"  J.  W.  Sullivan 
thus  recounts  what  the  Swiss  have  done  by  direct  legislation- 

"They  have  made  it  easy  at  any  time  to  alter  their  canton- 
al and  federal  constitutions, — that  is,  to  change,  even  radically, 
the  organization  of  society,  the  social  contract,  and  thus  to 
permit  a  peaceful  revolution  at  the  will  of  the  majority.  They 
have  as  well  cleared  from  the  way  of  majority  rule  every  ob- 
stacle,— privilege  of  ruler,  fetter  of  ancient  law,  power  of  legis- 
lator. They  have  simplified  the  structure  of  government- 
held  their  officials  as  servants,  rendered  bureaucracy  impossi- 
ble, converted  their  representatives  to  simple  committeemen- 
and  shown  the  parliamentary  system  not  essential  to  law-mak, 
ing.  They  have  written  their  laws  in  language  so  plain  that  a 
layman  may  be  judge  in  the  highest  court.  They  have  fore- 
stalled monopolies,  improved  and  reduced  taxation,  avoided  in- 
curring heavy  public  debts,  and  made  a  better  distribution  of 
their  land  than  any  other  European  country.  They  have 
practically  given  home  rule  in  local  affairs  to  every  commun- 
ity. They  have  calmed  disturbing  political  elements; — the 
press  is  purified,  the  politician  disarmed,  the  civil  service  well 
regulated.  Hurtful  partisanship  is  passing  away.  Since  the 
people  as  a  whole  will  never  willingly  surrender  their  sover- 
eignty, reactionary  movement  is  possible  only  in  case  the  na- 
tion should  go  backward.  But  the  way  is  open  forward.  So- 
cial ideals  may  be  realized  in  act  and  institution.  Even  now 
the  liberty-loving  Swiss  citizen  can  discern  in  the  future  a  free- 
dom in  which  every  individual, — independent,  possessed  of 
rights  in  nature's  resources  and  in  command  of  the  fruits  of 
his  toil, — may,  at  his  will,  on  the  sole  condition  that  he  respect 
the  like  aim  of  other  men,  pursue  his  happiness." 


Direct  Legislation.  155 

Proportional  Representation. 

'TpHE  term  proportional  representation  has  come  to  be  gener- 
*•  ally  applied  to  a  method  of  electing  representatives  whereby 
the  representation  shall  be  in  proportion  to  the  votes  polled  by 
the  several  parties,  or  groups  of  voters,  as  against  the  present 
method  of  electing  them  from  single  districts  by  a  plurality 
vote.  To  effect  this  end  numerous  plans  have  been  put  forth. 

The  cumulative  vote  allows  the  voter  as  many  votes  as 
there  are  representatives  to  be  elected  and  permits  him  to  dis- 
tribute them  as  he  pleases  among  the  candidates.  This  method 
is  applied  in  a  h'mited  degree  to  the  choice  of  members  of  the 
lower  house  of  the  Illinois  legislature.  Each  district  elects 
three  members,  and  the  voter  can  cast  three  votes  for  one  can- 
didate, one  and  a  half  votes  for  two,  or  one  vote  each  for  three. 

With  the  limited  or  restricted  vote  the  voter  has  a  less 
number  of  votes  than  the  number  of  representatives  to  be 
elected.  Thus  in  the  city  of  Boston  the  new  law  allows  the 
voter  to  vote  for  only  seven  aldermen  on  one  ticket,  and 
declares  the  twelve  candidates  receiving  the  highest  vote 
elected. 

The  preferential,  or,  as  it  is  commonly  known,  the  Hare 
vote,  allows  the  voter  to  cast  one  ballot  upon  which  he  has 
named  as  many  candidates  as  he  sees  fit,  the  candidates  named 
being  understood  to  represent  the  first,  second,  third,  etc., 
choice.  The  whole  number  of  ballots  cast  is  divided  by  the 
number  of  representatives  to  be  chosen,  and  the  quotient  is 
the  quota,  or  number  of  votes  required  to  elect  one  candidate. 
In  counting  the  ballots  the  first  choices  are  read  first;  the  can- 
didate who  receives  a  quota  is  declared  elected,  .and  the 
remaining  votes  cast  for  him  are  counted  for  the  next  name  on 
the  ballot  who  is  the  second  choice  of  the  voter. 

The  free  list,  or  Swiss  vote,  allows  the  voter  to  vote  for  a  list 
or  ticket  as  we  do  in  this  country,  and  to  designate  preferences 
on  the  list.  The  total  vote  is  divided  as  in  the  Hare  system  to 
get  the  quota,  and  the  several  parties  are  apportioned  repre- 
sentatives according  to  the  number  of  quotas  they  have. 
The  successful  candidates  are  those  standing  highest  on  their 


156  Direct  Legislation, 

respective  lists.  This  method  is  now  in  use  in  Switzerland  for 
the  election  of  representatives. 

The  Gove  system  is  a  modified  form  of  the  Hare  method. 
Instead  of  the  voter  naming  the  candidates  whom  he  prefers, 
the  candidates  themselves  before  election  announce  to  whom 
they  will  give  their  surplus  votes. 

The  proxy  vote  is  simply  an  introduction  of  the  corpora- 
tion vote  into  legislative  bodies.  The  candidates  who  are 
elected  in  the  legislative  assembly  cast,  not  their  individual 
votes,  as  at  present,  but  the  number  of  proxies  they  hold. 

It  will  be  seen  that  there  are  three  principles  involved  in 
these  several  methods,  the  election  by  cumulation  of  votes,  the 
election  by  quotas,  and  the  vote  by  proxies.  The  cumulative 
vote  was  the  first  to  be  put  into  actual  service,  being  used  in 
England  for  the  election  of  members  of  school  boards,  etc.,  and 
in  this  country  in  the  so-called  three-cornered  districts  for  the 
election  of  members  of  the  legislature.  It  still  has  the  support 
of  quite  a  number  of  persons,  but  its  limitations  are  now  com- 
ing to  be  recognized.  John  Stuart  Mill,  who  was  an  advocate 
of  the  cumulative  vote,  declared  it  to  be  merely  a  makeshift  in 
comparison  with  the  quota  system  of  Hare.  The  objection  to 
the  cumulative  vote  lies  in  the  fact  that  if  the  districts  are 
small  only  two  parties  can  obtain  representation,  and  these  in 
an  arbitrary  way,  while  if  the  districts  be  larger,  that  is,  if  the 
number  of  representatives  in  the  district  be  made  greater,  the 
waste  and  uncertainty  is  apparent.  A  party  may  decide  to 
vote  for  four  candidates  when  it  has  votes  enough  to  elect  six; 
or  it  may  try  for  six  when  it  has  votes  for  only  four.  In  either 
case  it  is  deprived  of  a  part  of  its  just  share  in  the  representa- 
tion. The  proxy  system  contains  some  theoretical  merits,  but 
it  is  feared  that  in  practice  it  would  not  work  well  at  present. 
The  tendency  to  hero-worship  would  prompt  so  many  voters  to 
give  their  proxies  to  a  few  favorites  that  the  real  voting 
strength  of  the  assembly  would  be  in  the  hands  of  two  or  three 
men,  thus  destroying  its  value  as  a  deliberative  body. 

The  real  strength  of  proportional  representation  lies  in 
some  form  of  the  quota  principle,  and  the  tendency  in  this, 
country  as  in  Switzerland  and  Belgium  is  tow  ard  the  free  list 


"  The  American  people  must  learn  the  lesson  of  money ,  or 
they  are  lost.'1 


THE  PHILOSOPHY  OF  MONEY. 


BY  HOWABD  S.  TAYLOB. 

% 

HpHE  word  "money"  is  derived  from  the  Latin  moneta  (from 
*•  moneo,  to  warn),  meaning  "warned"  or  "admonished." 
Moneta  was  a  surname  of  Juno,  because  she  was  believed  to 
have  warned  the  Romans  by  means  of  an  earthquake  to  offer 
sacrifice.  In  the  temple  of  Juno  Moneta  coins  were  made — 
hence  moneta,  meaning  either  a  mint,  or  coin,  or  coined  money. 
The  English  word  "money"  is  comprehensively  defined  by 
Webster  as  "any  currency  usually  and  lawfully  employed  in 
buying  and  selling;"  and  the  word  "currency"  is  defined  as 
"that  which  is  in  circulation  or  is  given  and  taken  as  having 
or  representing  value." 

Varieties  of  Money. 

Until  recent  times  many  substances  entirely  foreign  to  our 
modern  ideas  of  money  were  used  as  measures  of  value,  among 
which  were: 

Leather.  In  Rome  and  Sparta  700  B.  C.,  and  in  Persia, 
Tartary,  France  and  Spain  as  late  as  the  sixteenth  century. 

Bark.  China  used  the  inner  bark  of  the  mulberry  tree  in 
the  fourteenth  century. 

Base  Metals.  Iron  was  used  by  the  ancient  Spartans,  Ro- 
mans and  Hebrews;  tin  was  used  in  ancient  Syracuse  and 
Britain,  while  lead  is  still  used  in  Burmah  and  brass  in  China. 

All  of  these  forms  of  money  were  stamped  with  some  sort 
of  design  indicating  their  exchangeable  value  and  by  whose 
authority  they  were  issued. 

Wood.  Several  ancient  governments  used  money  made  of 
wood.  From  the  time  of  Henry  I.  (A.  D.  1273),  up  to  the  f oun- 

157 


158  The  Philosophy  of  Money. 

dation  of  the  Bank  of  England  in  1694,  a  period  of  over  four 
hundred  years,  England  circulated  a  legal- tender  money  made 
of  wood,  called  "exchange  tallies."  The  "tally"  issued  by  the 
British  Exchequer  was  a  stick  or  bit  of  peeled  rod  upon 
which  notches  were  cut,  indicative  of  an  account,  pledge  or 
other  commercial  transaction.  It  was  split  in  such  a  way  as 
to  divide  the  notches.  One-half  the  "tally"  was  given  to  the 
payer  and  one-half  was  retained  by  the  Exchequer;  and  the 
transaction  might  be  verified  at  any  time  by  fitting  the  two 
halves  together,  when  the  notches  would  be  found  to  "tally" 
with  each  other  if  the  check  had  not  been  tampered  with. 
Jonathan  Duncan  said  that  these  wooden  representatives  of 
value  circulated  freely  among  the  people  and  sustained  the 
trade  of  England. 

Wampum.  One  of  the  prevailing  forms  of  money  in  use 
among  the  New  England  colonies  was  wampum.  This  was 
simply  strings  of  white  and  black  beads  made  from  sea-shells 
found  along  the  New  England  coasts.  In  1641  Massachusetts 
made  these  beads  a  legal  tender  at  the  rate  of  six  for  a  penny 
up  to  the  sum  of  £10;  and  they  were  receivable,  at  that  rate, 
for  all  judgments  and  taxes.  In  1643  the  limit  of  this  legal 
tender  was  reduced  to  40  shillings.  In  1649  the  colony  passed 
a  statute  forbidding  the  receipt  of  wampum  for  taxes,  and  its 
use  as  money  rapidly  declined,  though  it  still  circulated  in  a 
limited  way  in  several  of  the  colonies  as  late  as  1704. 

Tobacco.  The  people  of  Maryland  and  Virginia,  before 
the  Revolutionary  War  and  for  some  time  after,  in  default  of 
gold  and  silver,  used  tobacco  as  money,  made  it  money  by  law, 
reckoned  the  fees  and  salaries  of  government  officers  in  tobac- 
co and  collected  the  public  taxes  in  that  article. 

Peltries.  In  an  early  day  several  of  the  Western  States 
made  peltries  a  legal  tender.  In  1785  the  people  of  the  terri- 
tory now  called  Tennessee  organized  a  State  called  "Franklin" 
and  passed  the  following  act,  which  is  illustrative  of  similar 
acts  in  other  States: 

"Be  it  enacted  by  the  General  Assembly  of  the  State  of 
Franklin,  and  it  is  hereby  enacted  by  the  authority  of  the 
same, 


The  Philosophy  of  Money.  159 

"That  from  the  first  day  of  January,  1789,  the  salaries  of 
the  officers  of  the  Commonwealth  be  as  follows: 

'His  Excellency  the  Governor,  per  annum,  1,000  deer  skins. 

"His  Honor  the  Chief  Justice,  per  annum,  500  deer  skins. 

"The  Secretary  to  His  Excellency,  the  Governor,  per  an- 
num, 500  raccoon  skins. 

"The  Treasurer  of  the  State,  450  raccoon  skins. 

"Each  County  Clerk,  300  beaver  skins. 

"Clerk  of  the  House  of  Commons,  200  raccoon  skins. 

"Members  of  the  Assembly,  per  diem,  3 raccoon  skins. 

"Justice's  fees  for  signing  a  warrant,  1  muskrat  skin. 

"To  the  Constable  for  serving  a  warrant,  1  mink  skin. 

"Enacted  into  law  the  18th  day  of  October,  1789,  under  the 
great  seal  of  State." 

Paper.  The  first  printed  bank  notes  of  which  we  have  any 
record  were  issued  by  Palmstruck,  a  banker  of  Sweden,  in  1660. 

Gold  and  Silver  have  been  used  as  money  metals  from 
the  earliest  times  of  recorded  history.  The  Bible  has  many 
references  to  the  use  of  both  gold  and  silver  as  early  as  the 
age  of  Abraham. 

Intrinsic  "Value. 

No  kind  of  money,  as  such,  has  any  intrinsic  value,  for  the 
instant  the  material  of  which  the  money  is  made  is  used  for 
another  purpose  it  ceases  to  be  money.  As  money,  the  sole 
value  of  the  material  arises  from  its  function  as  a  circulating 
medium;  and  even  the  value  of  gold  and  silver  as  used  in  the 
arts  and  sciences  will  be  largely  determined  by  the  demand 
for  them  for  money  purposes.  Of  recent  years  the  general  de- 
monetization of  silver  by  the  principal  nations  has  depreciated 
the  value  of  that  metal  about  one-half,  and  there  is  but  little 
doubt  that  if  gold  were  similarly  demonetized  it  would  corre- 
spondingly decline  in  value.  This  was  the  opinion  of  Cernuschi. 
He  says:  "If  all  nations  should  demonetize  gold  it  would  be 
worth  more  than  copper,  but  it  would  not  be  worth  much 
more." 

Appleton's  American  Encyclopedia  (vol.  XI,  p.  735)  says: . 
"After  the  discovery  of  gold  in  California,  Austria,  the  Nether- 
lands, Belgium  and  Germany  all  demonetized  gold  and  adopted 
silver  as  the  legal  tender  at  a  fixed  rate.  In  those  countries 
gold  only  circulated  as  a  commodity,  subject  to  daily  fluctu- 


160  The  Philosophy  of  Money. 

ations  in  value; and  as  a  consequence,  deprived  as  it  was  of 
legal  support  as  money,  it  was  but  little  used." 

Upon  the  subject  of  intrinsic  value  the  following  author- 
ities are  cited: 

"Congress  shall  have  power  to  coin  money  and  regulate 
the  value  thereof." — Constitution  of  the  United  States. 

"To  coin  money  and  regulate  the  value  thereof  as  an  act  of 
sovereignty  involves  the  right  to  determine  what  shall  be 
taken  and  received  as  money;  at  what  measure  or  price  it  shall 
be  taken;  and  what  shall  be  its  effect  when  passed  or  tendered 
in  payment  or  satisfaction  of  legal  obligations.  Government 
can  give  to  its  stamp  upon  leather  the  same  money  value  as  if 
put  upon  gold  or  silver  or  any  other  material.  The  authority 
which  coins  or  stamps  itself  upon  the  article  can  select  what 
substance  it  may  deem  suitable  to  receive  the  stamp  and  pass 
as  money;  and  it  can  affix  what  value  it  deems  proper,  inde- 
pendent of  the  intrinsic  value  of  the  substance  upon  which  it 
is  affixed.  The  currency  value  is  in  the  stamp,  when  used  as 
money,  and  not  in  the  material  independent  of  the  stamp.  In 
other  words,  the  MONEY  QUALITY  is  the  authority  which  makesit 
current  and  gives  it  power  to  accomplish  the  purpose  for  which 
it  was  created." — Tiffany,  Constitutional  Law. 

"Whatever  power  is  over  the  currency  is  vested  in  Con- 
gress. If  the  power  to  declare  what  is  money  is  not  in  Con- 
gress, it  is  annihilated.  We  repeat,  money  is  not  a  substance, 
but  an  impression  of  legal  authority,  a  printed  legal  decree." 
—  U.  S.  Supreme  Court  (12  Wallace,  p.  519). 

"The  gold  dollar  is  not  a  commodity  having  an  intrinsic 
value,  but  money  having  only  a  statutory  value;  and  every  dol- 
lar has  the  same  value  without  regard  to  the  material.  The 
gold  dollar  has  not  intrinsic  value." — Supreme  Court  of  Iowa 
(16  Iowa  Rep.,  p.  246). 

"Money  is  the  medium  of  exchange.  Whatever  performs 
this  function,  does  the  work,  is  money,  no  matter  what  it  is 
made  of." — Walker,  Political  Economy. 

"An  article  is  determined  to  be  money  by  reason  of  the 
performance  by  it  of  certain  functions,  without  regard  to  its 
form  or  substance." — Appleton's  Encyclopedia. 

"Money  is  a  value  created  by  law.  Its  basis  is  legal,  and 
not  material.  It  is,  perhaps,  not  easy  to  convince  one  that  the 
value  of  metallic  money  is  created  by  law.  It  is,  however  a 
fact." — Cernuschi. 

Specie  Basis. 

Where  paper  currency  is  made  redeemable  in  gold  or  silver 
the  paper  money  is  said  to  rest  on  a  "specie  basis."  This 


The  Philosophy  of  Money.  161 

monetary  scheme  now  prevails  throughout  the  civilized  world. 
In  almost  every  commercial  nation  a  large  portion  of  the  cur- 
rency in  use  is  paper  money  in  theory,  at  least,  convertible  into 
metallic  money  at  the  option  of  the  holder.  This  financial 
system  is  framed  upon  the  violent  hypothesis  that  real  money 
can  only  be  made  of  the  precious  metals  and  that  paper  bills 
are  not  money,  but  only  representatives  of  money.  Those  who 
are  addicted  to  this  theory  are  in  the  habit  of  designating 
coins  made  of  the  precious  metals  as  "primary  money,"  "re- 
demption money"  or  "standard  money;"  while  paper  bills  are 
called  "secondary  money,"  or  "credit  money,"  and  are  worth- 
less except  as  they  may  be  redeemed  in  "primary  money."  The 
specie  basis  may  be  gold  or  silver  or  both.  Since  -the  world- 
wide demonetization  of  silver  gold  only  is  the  basis  in  the  lead- 
ing nations  of  the  earth. 

The  specie  basis  theory  is  open  to  the  following  weighty 
objections: 

1.  It  is  contrary  to  the  fundamental  law  of  the  United  States 
— the  Constitution. 

Judge  Tiffany,  in  his  work  on  Constitutional  Law,  ex- 
pounding the  right  of  Congress  "to  coin  money  and  regulate 
the  value  thereof,"  says: 

"The  authority  which  coins  or  stamps  itself  upon  the  arti- 
cle can  select  what  substance  it  may  deem  suitable  to  receive 
the  stamp  and  pass  as  money;  and  it  can  affix  what  value  it 
deems  proper,  independent  of  the  intrinsic  value  of  the  sub- 
stance upon  which  it  is  affixed." 

This  learned  opinion,  which  annihilates  all  necessary  dis- 
tinction between  "primary"  and  "secondary"  money,  was  fol- 
lowed by  the  United  States  Supreme  Court  in  the  celebrated 
Greenback  cases,  and  hence  has  all  the  authority  of  law.  (See 
12  Wallace's  Reports,  p.  519.) 

2.  The  specie  basis  theory  is  contrary  to  the  facts  of  his- 
tory, some  of  which  will  be  recited  in  succeeding  pages.   Many 
instances  are  recorded  in  which  paper  and  other  material  have 
been  successfully  used  as  money  where  no  redemption  in  coin 
was  promised  or  possible. 

3.  The  specie  basis  theory  postulates  that  a  certain  amount 
of  "redemption  money"  will  support  or  float  a  proportional 


162  The  Philosophy  of  Money. 

amount  of  "credit  money."  As  the  specie  increases  the  paper 
money  may  be  safely  increased;  and  as  the  specie  decreases 
paper  money  must  also  be  decreased — a  philosophy  that  would 
lead  to  the  absurd  conclusion  that  when  all  specie  disappears 
the  people  can  have  no  money  of  any  kind.  Mr.  R.  H.  Patter- 
son, a  distinguished  English  economist,  truly  puts  the  paradox 
as  follows: 

"The  gospel  of  monetary  science  now  is,  that  when  a  coun- 
try does  not  want  paper  money,  it  ought  to  have  a  great  supply 
of  it;  and  when  it  does  require  paper  money  it  shall  have  none. 
When  a  country  has  enough  of  specie  it  ought  to  double  its 
currency  by  issuing  an  equal  amount  of  bank  notes;  and  when 
there  is  no  specie  there  should  likewise  be  no  notes.  Is  it  nec- 
essary to  discuss  such  a  theory?  In  order  to  be  rejected  it 
needs  only  to  be  stated;  in  order  to  be  rejected  it  only  needs  to 
be  understood.  It  is  a  theoretical  monstrosity  against  which 
common  sense  revolts— a  burlesque  of  reason  which  even  the 
present  generation  will  live  to  laugh  at." 

4.  The  specie  basis  is  insufficient  in  volume  to  redeem  the 
credit  money  which  is  necessarily  used  in  business.    The  entire 
circulating  medium  of  the  United  States  is,  approximately,  six- 
teen hundred  millions  of  dollars,  of  which  about  one-third  is 
gold,  one-third  silver  and  one-third  paper.    Since  silver  was 
demonetized  it  is  now  only  credit  money;  hence  we  have  but 
one  dollar  of  redemption  money  (gold)  with  which  to  redeem 
two  of  credit  money,  or,  taking  into  consideration,  as  we  should, 
the  vast  volume  of  checks,  drafts  and  other  credits  which  must 
finally  be  redeemed  in  gold,  it  is  perfectly  apparent  that  the 
United  States  has  not  one  dollar  of  redemption  money  with 
which  to  redeem  one  hundred  dollars  of  credit — and  thus  the 
whole  theory  of  redemption  becomes  a  mere  figment  incapable 
of  practical  realization.  And  what  is  true  of  the  United  States 
is  true  of  all  other  countries. 

5.  The  specie  basis  is  a  breeder  of  panics.   In  times  of  pros- 
perity and  confidence  credits  are  safely  increased  to  accommo- 
date the  increasing  volume  of  business;  and  the  specie  basis  is 
sufficient  merely  because  it  is  not  put  to  the  test,  the  people 
preferring  paper  money  because  of  its  superior  convenience ; 
but  at  such  a  time  a  pebble  may  start  an  avalanche.    A  start- 
ling failure  occurs  somewhere,  creditors  presa  for  liquidation, 


The  Philosophy  of  Money.  1<& 

the  banks  are  besieged,  and,  being  unable  to  redeem  their 
promises  to  pay  gold,  they  suspend — and  the  panic  is  complete- 
Such  is  the  recurrent  history  of  finance  in  all  civilized  lands. 

Charles  Sears,  an  eminent  authority,  says  of  the  gold 
basis: 

"Within  the  last  fifty  years,  say,  a  money  crisis  has  coine 
quite  regularly  every  ten  years.  Something— any  one  of  a 
dozen  causes,  few  know  what — sets  gold  to  flowing  out.  Fifty 
millions  withdrawn  in  a  short  time  from  its  usual  place  pt  de- 
posit is  quite  sufficient  to  make  the  whole  volume  of  coin  dis- 
appear from  ordinary  circulation  as  completely  as  if  it  ha-J 
never  existed.  The  metallic  basis  is  gone — slipped  out;  the 
pivot  of  the  system  is  dislocated;  somebody  wanted  it  and  took 
it,  and  the  pyramid  tumbles  down,  burying  in  its  ruins  three- 
fourths  of  a  business  generation." 

To  the  same  effect  is  the  opinion  of  the  famous  American 
jurist,  Judge  Walker.  He  says: 

"The  whole  paper  scheme  is  founded  on  the  presumption 
that  the  holders  of  these  bills  will  not  generally  ask  for  specie 
at  the  same  time;  and,  therefore,  the  amount  of  specie  kept  in 
reserve  bears  but  a  small  proportion  to  the  notes  in  circulation. 
And  this  is  the  great  evil  of  the  system.  A  general  and  simul- 
taneous demand  for  specie  cannot  possibly  be  met,  and  disas- 
ter must  follow.  To  enforce  a  universal  performance  of  these 
promises  is  to  insure  their  being  broken.  Every  sudden  panic, 
therefore,  must  produce  wide-spread  calamity."—  Walker's 
American  Law,  p.  152. 

6.  The  specie  basis  affords  a  means  by  which  greedy  specula- 
tors work  "a  corner"  in  gold  and  thus  extort  large  sums  in 
profits  which  the  people  eventually  have  to  pay.  The  laws  and 
official  rulings,  for  instance,  which  require  the  maintenance  of 
a  gold  reserve  in  the  Federal  treasury  and  the  payment  of 
duties  and  interest  on  the  public  debt  in  gold,  create  a  special 
and  imperative  demand  for  the  yellow  metal;  and  as  the  supply 
of  that  kind  of  money  is  almost  entirely  in  the  hands  of  a  few 
great  banking  firms,  the  latter  can,  at  their  pleasure,  extort 
such  terms  as  they  please  when  applied  to  for  gold.  An  in- 
stance of  the  kind  occurred  on  Feb.  8th,  1895.  On  that  day,  in 
order  to  maintain  its  gold  reserve,  the  United  States  govern- 
ment purchased  of  M.  Rothschild  &  Sons  and  J.  P.  Morgan  & 
Co.,  backers  of  London,  3,500,000  ounces  of  standard  gold  coin 
of  the  United  Statei  at  the  rate  of  $17.80441  per  ounce,  and 


164  The  Philosophy  of  Money. 

paid  for  it  in  United  States  four  per  cent,  thirty-year  coupon 
or  registered  bonds,  interest  payable  quarterly.  These  bonds 
were  taken  by  the  British  bankers  at  $1.04,  and  were  sold  by 
them  within  ten  days  at  $1.18,  by  which  the  foreign  gold  ex- 
ploiters made  a  net  profit  of  about  eight  million  dollars — to  be 
eventually  paid  by  the  people. 

7.  The  specie  basis  must  inevitably  become  more  and  more 
insufficient  with  the  lapse  of  time,  and  the  disasters  due  to  it  in 
the  past  become  more  frequent  and  distressing.  The  popula- 
tion of  the  world  is  increasing,  barbarous  nations  are  becoming 
commercial,  and  commercial  nations  are  extending  their 
commerce  with  unexampled  rapidity  from  year  to  year. 
With  this  increasing  business  must  come  a  necessity 
for  a  corresponding  increase  in  the  medium  of  exchange — 
money.  But  no  material  increase  of  the  precious  metals  is 
possible.  On  the  contrary,  as  the  mines  successively  become 
exhausted,  or  deeper  and  more  difficult  to  work,  it  is  clear  that 
the  annual  supply  of  gold  and  silver  must  become  increasingly 
insufficient  to  replace  that  which  has  been  lost  or  consumed  in 
the  arts  and  sciences;  and  hence  the  difficulties  of  the  specie 
basis  will  of  necessity  become  more  and  more  aggravated  as 
time  goes  on. 

Considerations  such  as  the  foregoing  have  led  to  the  rapid 
development  of  a  new  school  of  finance  which,  rejecting  the 
specie  basis  as  antiquated  and  no  longer  tenable,  professes  to 
find  a  sufficient  guarantee  for  the  stability  of  money  in 
The  IJegal  Tender  Basis. 

President  Grant  said: 

"My  own  judgment  is  that  a  specie  basis  cannot  be 
reached  and  maintained  until  our  exports  exclusive  of  gold  pay 
for  our  imports,  interest  due  abroad,  and  other  specie  obliga- 
tions, or  so  nearly  as  to  leave  an  appreciable  accumulation  of 
the  precious  metals  in  the  country  from  the  product  of  our 
mines." — Message,  Dec.  1, 1873. 

Plentiful  experience  has  demonstrated  that  a  paper  money 
based  upon  the  authority,  faith  and  credit  of  the  government 
and  made  by  law  a  full  legal  tender  for  all  debts  will  serve  all 
the  purposes  of  a  staple  circulating  medium  as  effectually  as 
gold  itself. 


The  Philosophy  of  Money.  165 

The  effectiveness  of  legal-tender  paper  depends  upon  two 
circumstances : 

1.  Government  can  by  law  compel  the  people  to  take  it  in 
satisfaction  of  private  debts,  by  refusing  to  enforce  contracts 
payable  in  any  other  kind  of  money. 

2.  The  government  may  receive  such  legal-tender  paper 
in  satisfaction  of  all  kinds  of  taxes  and  duties,  thus  giving  such 
money  a  positive  value  equal  to  gold. 

The  U.  S.  Supreme  Court,  in  the  celebrated  Greenback 
cases,  says: 

"Making  these  notes  legal  tender  gave  them  new  uses  (or 
functions),  and  it  requires  no  argument  to  prove  the  value  of 
things  as  in  proportion  to  the  uses  to  which  they  may  be  ap- 
plied."— 12  Wallace  Reports,  p.  519. 

Benjamin  Franklin,  defending  the  Pennsylvania  colonial 
paper  money  before  a  committee  of  the  English  Parliament,  in 
1764,  said: 

"On  the  whole  no  method  has  hitherto  been  found  to 
establish  a  medium  of  trade,  in  lieu  of  coin,  equal  in  all  its 
advantages  to  bills  of  credit  founded  on  sufficient  taxes  for  dis- 
charging it  at  the  end  of  the  time,  and  in  the  meantime  made 
a  general  legal  tender." 

Thomas  Jefferson,  in  his  letter  to  Mr.  Epps,  said  of  govern- 
ment paper  money: 

"It  is  the  only  resource  which  can  never  fail  them,  and  it  is 
an  abundant  one  for  every  necessary  purpose.  Treasury  bills, 
bottomed  on  taxes,  bearing  or  not  bearing  interest  as  may  be 
found  necessary,  thrown  into  circulation,  will  take  the  place  of 
BO  much  gold  or  silver." 

President  Jackson,  in  his  message,  1829,  said: 

"  I  submit  to  the  wisdom  of  the  legislature  whether  a 
national  one  [currency]  founded  on  the  credit  of  the  government 
and  its  resources  might  not  be  devised." 

John  C.  Calhoun,  in  a  speech  in  the  U.  S.  Senate  Dec.  18th, 
1837,  said: 

"  It  appears  to  me,  after  bestowing  the  best  reflection  I  can 
give  the  subject,  that  no  convertible  paper — that  no  paper  that 
rests  upon  a  promise  to  pay — is  suitable  for  a  currency.  It  is 
the  form  of  credit  paper  in  transactions  between  men,  but  not 
for  a  standard  of  value  to  perform  exchanges  generally,  which 
constitutes  the  appropriate  functions  of  money  or  currency. 
No  one  can  doubt  but  that  the  credit  of  the  government  is  bet- 


160  The  Philosophy  of  Money. 

ter  than  that  of  any  bank — more  staple  and  safe.  I  now  under- 
take to  affirm,  and  without  the  least  fear  that  I  can  be 
answered,  that  paper  money  issued  by  the  government,  to  re- 
ceive it  for  all  dues,  would  form  a  perfect  circulation  which 
would  not  be  abused  by  the  government;  that  it  would  be 
uniform  with  the  metals  themselves." 

Legal-tender  paper  money  is  usually  issued  in  times  of 
war  when  gold  and  silver  are  hoarded  or  exported  from  the 
country;  and,  as  a  consequence,  such  legal  tender  is  put  to  the 
severest  possible  tests,  those  of  an  imperilled  government,  dis- 
turbed industry  and  impeded  foreign  trade;  nevertheless,  his- 
tory abounds  with  instances  to  prove  the  entire  sufficiency  of 
this  kind  of  money. 

In  1156  the  Republic  of  Venice  established  a  system  of 
paper  credits  which  served  as  the  principal  circulating  medium 
of  that  country  until  1797.  This  money  was  always  at  par  and 
frequently  at  a  premium.  In  1770  the  Russian  government 
issued  its  own  notes,  which  sustained  the  government  through 
two  wars  and  commanded  a  premium  over  coin.  In  1797  to 
1823  England  issued  $225,000,000  full  legal-tender  paper  with 
which  to  carry  on  war  against  Napoleon.  In  his  "Political 
Economy,"  John  S.  Mill  says  of  these  notes:  "After  they  were 
made  a  legal  tender  they  never  depreciated  a  particle." 

During  the  colonial  period  of  American  history  several  of 
the  colonies  issued  and  successfully  maintained  legal-tender 
paper  money.  One  instance  is  illustrative  of  them  all.  In  1739 
Pennsylvania  issued  $400,000  in  legal-tender  paper  not  redeem- 
able in  coin,  but  receivable  for  taxes,  which  was  loaned  directly 
to  the  people  on  security  of  land  and  plate.  This  money  con- 
tinued in  circulation  until  it  was  prohibited  by  the  British 
government  in  1775.  Commenting  on  the  success  of  this  sys- 
tem. Dr.  Franklin  said:  "Between  the  years  1740  and  1775, 
while  abundance  reigned  in  Pennsylvania  and  there  was  peace 
in  all  her  borders,  a  more  happy  and  prosperous  population 
could  not,  perhaps,  be  found  on  this  globe." 

During  the  Franco-German  war  France  issued  an  enor- 
mous volume  of  legal-tender  paper  money,  of  which  Victor 
Bonnet,  the  eminent  French  economist,  says:  "In  the  midst  of 
the  greatest  calamities  that  ever  befell  a  nation,  with  an  enor- 


The  Philosophy  of  Money.  167 

mous  ransom  to  pay  a  foreign  nation,  and  with  great  domestic 
losses  to  repair,  a  credit  circulation  was  maintained  four  times 
as  large  at  its  base  without  depreciation.  This  circulation 
reached  $600,000,000." 

During  the  war  of  the  rebellion  in  the  United  States 
1861-5)  the  government  issued  a  volume  of  legal  tender  "green- 
backs" which  on  July  1st,  1865,  was  outstanding  to  the  amount 
of  $432,687,966. 

The  first  $60,000,000  of  this  paper  money,  issued  under 
authority  of  the  acts  of  July  17  and  August  5th,  1861,  and 
February  12th,  1862,  called  "demand  notes,"  was  made  a  full 
legal  tender  for  all  debts  public  and  private.  This  issue  never 
fell  below  and  often  was  above  par  as  compared  with  gold.  In 
a  speech  delivered  in  the  U.  S.  Senate  Julj  4th,  1862,  Hon.  John 
Sherman  said  of  these  "demand  notes  ": 

"  The  notes  are  now  held  and  hoarded.  The  first  issue  of 
$60,000,000  were  issued  with  the  right  of  being  converted  into 
6  per  cent,  twenty-year  bonds  and  with  the  privilege  of  being 
paid  for  duties  in  customs.  They  are  now  far  above  par  and 
hoarded." 

In  Schucker's  Life  of  Salmon  P.  Chase,  p.  225,  the  author 
•ayg: 

"The  demand  notes,  being  receivable  for  customs  the  sam» 
as  coin,  kept  pace  with  the  advance  in  the  price  of  coin." 

All  of  the  greenbacks  except  the  first  $60,000,000  were  pur- 
posely depreciated  by  the  "exception  clause;"  that  is,  they  were 
made  a  legal  tender  for  all  debts,  public  and  private,  except 
duties  on  imports  and  interest  on  the  public  debt,  which 
latter  were  required  to  be  paid  in  coin.  This  exception  clause 
created  a  special  demand  for  coin,  and  as  a  consequence  metal- 
lic money  rose  to  a  great  premium,  at  one  time  (July,  1864)  be- 
ing at  a  premium  of  $2.85  in  greenbacks  to  SI  in  coin.  That 
these  greenbacks  were  purposely  depreciated  stands  upon  the 
evidence  of  Hon.  John  Sherman,  who  in  a  report  as  chairman  of 
the  Senate  Finance  Committee,  made  on  the  12th  of  November, 
1867,  said:  "But  it  was  found  that  with  such  a  restriction 
upon  the  notes  the  bonds  could  not  be  negotiated,  and  it  ba- 


168  The  Philosophy  of  Money. 

came  necessary  to  depreciate  the  notes  in  order  to  make  a  mar- 
ket for  the  bonds." 

Speaking  of  the  amendment  by  which  the  "exception 
clause"  was  passed,  Hon.  Thaddeus  Stevens  said  in  a  speech 
delivered  in  the  House,  February  20th,  1862: 

"It  has  all  the  bad  qualities  that  its  enemies  charged  in 
the  original  bill  and  none  of  its  benefits.  It  now  creates 
money  and  by  its  very  terms  declares  it  a  depre- 
ciated currency.  It  makes  two  classes  of  money — one  for 
the  banks  and  brokers,  and  another  for  the  people.  It  dis- 
criminates between  the  rights  of  different  classes  of  creditors, 
allowing  the  rich  capitalists  to  demand  gold,  and  compelling 
the  ordinary  lender  of  money  on  individual  security  to  receive 

notes  which  the  government  had  purposely  discredited 

But  now  comes  the  main  clause.  All  classes  of  people  shall 
take  these  notes  at  par  for  every  article  of  trade  or  contract 
unless  they  have  money  enough  to  buy  United  States  bonds, 
and  then  they  shall  be  paid  in  gold.  Who  is  that  favored  class? 
The  banks  and  brokers,  and  nobody  else." 

This  conspiracy  of  the  lawmakers,  by  which  the  soldier  in 
the  field  was  paid  in  depreciated  greenbacks  while  the  Wall 
Street  usurer  received  gold,  did  not  deprive  the  paper  money 
of  its  splendid  functions.  While  coin  rose  to  a  great  premium, 
owing  to  the  special  use  made  of  it  in  payment  of  customs  and 
interest  on  the  public  debt,  the  legal-tender  money  carried  on 
the  great  war  and  conducted  the  business  of  the  most  prolific 
and  prosperous  epoch  in  the  history  of  the  United  States. 

As  a  matter  of  fact  the  greenbacks,  discredited  by  legis- 
lation as  they  were,  did  not  depreciate  in  comparison  with  com- 
modities, but  gold  appreciated  owing  to  the  special  demand 
created  for  it  by  law.  The  people  never  lost  confidence  in  the 
government  paper  money,  even  in  the  darkest  hours  of  the 
panic  of  1873,  as  is  shown  by  the  language  of  President  Grant. 
He  said : 

"The  experience  of  the  present  panic  has  proven  that  the 
currency  of  the  country,  based,  as  it  is,  upon  the  credit  of  the 
country,  is  the  best  that  ever  has  been  devised.  Usually  in 
times  of  such  trials,  currency  has  become  worthless  or  so  much 
depreciated  in  value  as  to  inflate  the  values  of  all  necessaries 
of  life  as  compared  with  currency.  Everyone  holding  it  has 
be«n  anxious  to  dispose  of  it  on  any  terms.  Now  we  witness 


The  Philosophy  of  Money.  169 

the  reverse.    Holders  of  currency  hoard  it  as  they  did  gold  in 
former  experiences  of  like  nature." — Message,  Dec.  1, 1873. 

The  Functions  of  Money. 

The  functions  or  uses  of  money  are  three-fold: 

It  is  a  measure  of  value. 

It  is  a  medium  of  exchange. 

It  is  a  means  of  storing  wealth. 

As  a  measure  of  value  money  determines  in  what  propor- 
tion commodities  and  services  shall  be  interchanged.  The 
yardstick  measures  the  quantity  of  fabrics;  but  some  fabrics 
are  more  valuable  than  others.  A  bolt  of  silk,  for  instance,  is 
more  valuable  than  a  bolt  of  muslin — a  difference  which  the 
yaidstick,  alone,  cannot  indicate;  it  merely  measures  quantities, 
not  values.  Here  the  money  measure  becomes  necessary.  The 
abstract  unit  which  we  call  a  dollar  measures  the  values  of 
both  silk  and  muslin  and  determines  how  many  yards  of  mus- 
lin should  be  exchanged  for  a  yard  of  silk. 

Money  is  a  medium  of  exchange.  Smith  has  a  horse  and 
buggy  which  he  wishes  to  exchange  for  a  piano  belonging  to 
Brown.  Brown  is  willing  to  part  with  the  piano,  but  does  not 
want  a  horse  and  buggy;  he  does  want,  however,  a  gold  watch. 
Jones  has  such  a  watch,  but  wants  to  dispose  of  it  for  clothing. 
Wilson  has  clothing,  but  he  wants  coal.  For  these  four  parties 
to  find  out  each  other's  wants  and  effect  an  exchange  of  actual 
commodities  and  adjust  the  difference  in  value  between  the 
articles  would  involve  time  and  labor  and  make  so  many  diffi- 
culties that  the  transactions  would  bo  greatly  delayed,  if  not 
defeated.  Here  money  performs  its  beneficent  offices  as  a  me- 
dium of  exchange.  Smith  sells  his  horse  and  buggy  for  money 
and  with  it  purchases  Brown's  piano.  Brown  buys  the  watch 
he  wants,  and  thus  money  goes  from  hand  to  hand,  affecting  in- 
numerable exchanges,  not  only  in  the  small  neighborhood,  but 
in  great  commercial  circles,  thereby  bringing  the  antipodes 
together  and  enabling  them  to  supply  each  other's  wants  with 
the  least  possible  loss  of  time  and  labor. 

Money  is,  also,  a  means  of  storing  wealth.  Jackson  has 
a  valuable  farm,  but  is  getting  too  old  or  infirm  in  health  to 


170  The  Philosophy  of  Money. 

work  it.  He  might  exchange  it  for  a  great  quantity  of  food, 
clothing,  and  other  necessaries  sufficient  to  last  him  the  re- 
mainder of  his  life;  but  these  articles  could  not  safely  be  stored 
so  as  to  preserve  them  for  future  years,  and  some  representa- 
tive, that  can  be  stored,  must  be  found.  Money  is  that  repre- 
sentative. Jackson  sells  his  farm  for  money,  and  with  the 
money  purchases  from  time  to  time  the  necessaries  required. 

Prom  a  brief  study  of  these  three  great  functions  per- 
formed by  money  may  be  readily  determined  what  should  be 
the  characteristics  of  a  perfect  currency,  one  that  would  most 
effectually  and  justly  serve  mankind. 

As  a  measure  of  values  and  as  a  means  of  storing  wealth 
it  is  clear  that  money  ought  to  be  stable,  that  is,  it  should  as 
nearly  as  possible  have  the  same  purchasing  power  from  year 
to  year  and  in  all  sections  of  the  country;  for  when  money 
fluctuates  in  purchasing  power  it  is  obvious  that  some  men 
will  gain  and  some  will  lose  without  any  merit  or  fault  upon 
their  part,  but  simply  in  consequence  of  the  fluctuations  in  the 
value  of  money.  This  is  particularly  true  in  case  of  debt,  for 
if  a  debt  be  contracted  when  money  is  cheap,  and  paid  when 
money  is  dear,  the  debtor  will  evidently  lose  by  the  change, 
and  if  the  circumstances  be  reversed  the  creditor  will  lose. 

To  secure  such  stability  or  uniformity  of  purchasing  power 
no  measure  or  method  is  so  effectual  as  for  the  government  to 
make  all  its  money  a  full  legal  tender  for  all  debts  public  and 
private. 

Ae  a  medium  of  exchange  the  volume  or  quantity  of  money 
in  circulation  should  be  sufficiently  large  to  accomplish  the 
transaction  of  business  without  waste  or  delay.  In  estimating 
the  necessary  volume  it  is  proper  to  take  into  consideration  the 
numbers  of  population,  the  magnitude  of  business  transacted, 
and  since  a  nimble  dollar  will  perform  the  work  of  several  slow 
ones,  the  "effectiveness"  or  rapidity  with  which  money  circu- 
lates; and  si  nee  population  and  business  are,  upon  the  whole, 
constantly  increasing,  and  the  rapidity  of  circulation  (until 
some  swifter  method  of  locomotion  be  discovered)  remains  un- 
altered, the  volume  of  money,  clearly,  ought  to  be  increased 
from  year  to  year.  Few  who  have  not  patiently  studied  the 


The  Philosophy  of  Money.  171 

problems  of  finance  understand  the  mighty  effects  of  an  expan- 
sion or  contraction  of  the  money  volume  upon,  not  only  the 
material,  but  the  moral  well-being  of  mankind.  The  very 
heart  of  the  complex  money  question,  the  center  of  all  ita 
divergent  issues,  is  the  question  of 

The  Volume  of  Money. 

The  volume  or  quantity  of  money  in  circulation  is  always 
hard  to  determine,  principally  because  banks,  brokers  and  their 
allies  in  official  and  journalistic  positions  are  generally  inter- 
ested in  concealing  or  misstating  the  facts  on  purpose  to  mis- 
lead the  public;  so  that,  not  infrequently,  a  period  of  financial 
disaster  steals  upon  the  people  unaware  and  they  are  compelled 
to  endure  all  the  miseries  of  such  an  event  without  being  able 
to  detect  the  cause  or  apply  the  remedy.  In  such  circum- 
stances the  masses  may  dimly  perceive  that  they  are  being 
robbed,  yet,  unable  to  detect  the  means  of  their  spoliation,  they 
attribute  it  to  every  cause  but  the  real  one,  and  thus  the 
spoliators  are  enabled  to  repeat  their  robbery  again  and  again, 
undetected  by  any  save  a  few  whose  complaints  are  regarded 
as  the  extravagances  of  uninformed  or  fanatic  minds. 

To  fully  comprehend  how  the  exploiters  of  money  may  en- 
rich themselves  and  impoverish  others  by  merely  manipulating 
the  currency  it  is  necessary  to  understand  the  primary  fact 
that  an  increasing  volume  of  money  brings  rising  prices  and 
business  activity,  while  a  diminishing  volume  of  money 
causes  falling  prices  and  business  stagnation.  Upon  this  propo- 
sition the  following  authorities  are  cited: 

David  Hume,  the  English  historian,  in  his  essay  on 
"Money,"  says: 

'•We  find  that  in  every  kingdom  into  which  money  begins 
to  flow  in  greater  abundance  than  formerly  everything  takes  a 
new  face;  labor  and  industry  gain  life,  the  merchants  become 
more  enterprising,  the  manu  acturers  more  diligent  and  skill- 
ful, and  the  farmer  follows  his  plow  with  greater  attention  and 
alacrity.  The  good  policy  of  the  government  consists  of  keep- 
ing it,  if  possible,  still  increasing  as  long  as  there  ia  an  unde- 
veloped resource  or  room  for  a  new  immigrant,  because  by  that 
means  there  is  kept  alive  a  spirit  of  industry  in  the  nation 
which  increases  the  stock  of  labor,  in  which  consists  all  real 


172  The  Philosophy  of  Money. 

power  and  riches.  A  nation  whose  money  decreases  is  actually 
weaker  and  more  miserable  than  other  nations  which  possess 
less  money  but  are  on  the  increasing  hand." — Essays  and 
Treatises,  vol.  /,  p.  283. 

Henri  Cernuschi,  an  ex-banker  of  Paris,  and  recognized  as, 
perhaps,  the  most  eminent  of  the  French  writers  on  finance, 
says: 

"The  value  of  money  depends  upon  its  quantity.  It  is  the 
same  with  gold  as  with  greenbacks.  If  the  stock  in  circulation 
is  augmented  the  purchasing  power  of  every  greenback  is  dimin- 
ished; and  so  with  gold  and  silver.  The  purchasing  power  is 
always  in  relation  to  the  quantity  of  the  money." — Nomisma, 
p.  15. 

"That  commodities  would  rise  and  fall  in  price  in  propor- 
tion to  the  increase  or  diminution  of  money  I  assume  as  a  fact 
that  is  incontrovertible.  That  such  would  be  the  case  the 
most  celebrated  writers  on  political  economy  are  agreed. ' — 
Ricardo,  Political  Economy. 

"If  the  whole  money  in  circulation  was  doubled  prices 
would  double.  If  it  was  only  increased  one-fourth,  prices 
•would  rise  one-fourth.  The  very  same  effect  would  be  pro- 
duced on  prices  if  we  suppose  the  goods  (the  uses  for  money) 
diminished  instead  of  the  money  increased;  and  the  contrary 
effect  if  the  goods  were  increased  or  the  money  diminished.  So 
that  the  value  of  money,  all  other  things  remaining  the  same, 
varies  inversely  as  its  quantity;  every  increase  in  quantity 
lowering  its  value  and  every  diminution  raising  it  in  a  ratio 
exactly  equivalent." — J.  S.  Mill,  Principles  of  Political 
Economy. 

Wm.  H.  Crawford,  Secretary  of  the  Treasury,  in  his  report, 
Feb.,  1820,  says: 

"  All  intelligent  writers  on  currency  agree  that  when  it 
(money)  is  decreasing  in  amount  poverty  and  misery  must 
prevail." 

By  joint  resolution  of  the  United  States  Congress  Aug. 
15th,  1876,  a  "  United  States  Monetary  Commission  "  was  ap- 
pointed to  inquire  into  the  prevailing  "  hard  times."  It  con- 
sisted of  Senators  John  P.  Jones,  Lewis  V.  Bogy  and  Geo.  S. 
Boutwell,  and  Congressmen  Randall  L.  Gibson,  George  Willard 
and  Richard  P.  Bland;  to  whom  were  added  Hon.  Wm.  S. 
Groesbeck  of  Ohio,  Prof.  Francis  Bowen  of  Massachusetts,  and 
Geo.  M.  Western  of  Maine;  the  three  latter  acting  as  secre- 
taries of  the  commission.  On  March  2d,  1877,  the  commission 


The  Philosophy  of  Money.  173 

reported.  The  following  extracts  are  taken  from  the  report : 
"While  the  volume  of  money  is  decreasing,  though  very 
slowly,  the  value  of  each  unit  of  money  is  increasing  in  a  cor- 
responding ratio,  and  property  and  wages  are  decreasing.  Those 
who  have  contracted  to  pay  money  find  that  it  is  constantly 
becoming  more  difficult  to  meet  their  engagements.  The  mar- 
gins of  securities  melt  rapidly,  and  their  confiscation  by  the 
creditor  becomes  only  a  question  of  time.  All  productive 
enterprises  are  discouraged  and  stagnate  because  the  cost  of 
producing  commodities  today  will  not  be  covered  by  the  price 
obtainable  for  them  tomorrow.  Exchanges  become  sluggish 
because  those  who  have  money  will  not  part  with  it  for  either 
property  or  service,  for  the  obvious  reason  that  money  alone  is 
increasing  in  value  while  everything  else  is  decreasing  in  price. 
This  results  in  the  withdrawal  of  money  from  the  channels  of 
circulation  and  its  deposit  in  great  hoards  where  it  can  exert 
uo  influence  on  prices.  Money  in  shrinking  volume  becomes 
the  paramount  object  of  commerce  instead  of  the  beneficent 
instrument.  Instead  of  mobilizing  industry,  it  poisons  and 
dries  up  its  life  currents.  It  is  the  fruitful  source  of  political 
and  social  disturbance.  It  foments  strife  between  labor  and 
other  forms  of  capital  while  itself,  hidden  away,  gorges  on 
both.  It  rewards  close-fisted  lenders  and  filches  from  and 
bankrupts  enterprising  producers.  An  increasing  value  of 
money  and  falling  prices  have  been  and  are  more  fruitful  of 
human  misery  than  war,  pestilence  or  famine;  they  have 
wrought  more  injustice  than  all  the  bad  laws  ever  enacted." — 
Report  of  U.  S.  Monetary  Commission,  vol.  I,  p.  10  et  seq. 

Pointing  out  how  a  contraction  of  the  money  volume  in- 
creases the  debt  obligations  of  the  past,  R.  H.  Patterson, 
especially  commended  by  Gladstone  as  one  of  the  ablest  of 
English  writers  on  finance,  says: 

"And  what  is  such  a  dearth  of  money  and  rise  in  the 
measure  of  value  but  an  injustice  to  the  many  to  the  gain  of 
the  few — an  unfair  exaltation  of  the  power  of  the  past  over 
the  present,  an  unfair  and  undesirable  aggravation  of  the  pov- 
erty of  the  poor  and  the  wealth  of  the  rich — a  stereotyping  of 
classes  according  to  wealth,  until  they  tend  to  become  perma- 
nent ?  We  have  seen  how  powerful  and  beneficial  was  the  in- 
flux of  the  precious  metals  from  the  New  World  four  centuries 
ago  in  breaking  the  social  bondage  which  had  settled  over 
Europe  during  the  long  night  of  the  Dark  Ages,  enabling  that 
generation  to  escape  from  the  heritage  of  the  past  and  bound 
forward  upon  the  new  career  then  opening  to  mankind.  Such 
times  come  from  the  hand  of  Providence,  and  with  an  exceed- 
ing rarity  even  in  the  long  carder  of  civilized  mankind.  But 


174  The  Philosophy  of  Money. 

at  least  let  us  avoid  the  opposite  and  never  allow  successive 
generations  to  be  unfairly — nay,  most  unjustly,  though  it  may 
not  be  so  meant — handicapped,  each  in  its  own  race,  owing  to 
a  growing  dearth  and  dearness  of  money." — The  New  Qolden 
Age,  vol.  II,  p.  500. 

President  Grant  said: 

"To  increase  our  exports  sufficient  money  is  required  to 
keep  all  the  industries  of  the  country  employed.  Without  this 
national  as  well  as  individual  bankruptcy  must  ensue." — 
Message,  Dec.  1st,  1873. 

Hon.  John  Sherman,  in  a  speech  in  the  Senate,  Jan.  27, 
1869,  said  in  opposition  to  a  bill  to  contract  the  currency  by  re- 
tiring the  greenbacks: 

"It  is  not  possible  to  take  this  voyage  without  the  sorest 
distress.  To  every  person  except  a  capitalist  out  of  debt,  or  a 
salaried  officer,  or  annuitant,  it  is  a  period  of  loss,  danger,  lass- 
itude of  trade,  fall  of  wages,  suspension  of  enterprise,  bank- 
ruptcy and  disaster.  ...  It  means  the  ruin  of  all  dealers 
whose  debts  are  twice  their  business  capital  though  one-third 
less  than  their  actual  property.  It  means  the  fall  of  all  agri- 
cultural productions  without  any  great  reduction  of  taxes. 
When  that  day  comes  every  man,  as  the  sailor  says,  will  be 
close-reefed;  all  enterprise  will  be  suspended,  every  bank  will 
have  contracted  its  currency  to  the  lowest  limit;  and  the  debtor, 
compelled  to  meet  in  coin  a  debt  contracted  in  currency,  will 
lied  the  coin  hoarded  in  the  treasury,  no  representative  of  coin 
in  circulation,  his  property  shrunk  not  only  to  the  extent  of 
the  depreciation  of  the  currency,  but  still  more  by  the  artificial 
scarcity  made  by  the  holders  of  gold.  To  attempt  this  task  by 
a  surprise  upon  our  people,  by  arresting  them  in  the  midst  of 
their  lawful  business  and  applying  a  new  standard  of  value  to 
their  property  without  any  reduction  of  their  debts,  or  giving 
them  an  opportunity  to  compound  with  their  'creditors,  or  to 
distribute  their  losses,  would  be  an  act  of  folly  without  an  ex- 
ample in  evil  in  modern  times." — Congressional  Globe,  1869, 
p.  629. 

In  a  speech  in  the  United  States  Senate,  March  17,  1874, 
General  John  A.  Logan  pointed  out  the  cause  of  the  panic  of 
1873  as  follows: 

"But,  sir,  that  the  panic  was  not  due  to  the  character  of 
the  currency  is  proved  by  the  history  of  the  panic  itself.  .  .  , 
No,  sir,  the  panic  was  not  attributable  to  the  character  of  the 
currency,  but  to  a  money  famine,  and  to  nothing  else.  In  the 
very  midst  of  the  panic,  we  saw  the  leading  bankers  and  busi- 
ness men  of  New  York  pressing  and  urging  the  President  and 


The  Philosophy  of  Money-  175 

the  Secretary  of  the  Treasury  to  let  loose  twenty  or  twenty-five 
millions  more  of  the  same  paper  for  their  relief — the  very 
same  men  who  today  denounce  it  as  a  disgrace  to  our  govern- 
ment. It  was  good  enough  for  them  when  they  were  in  trouble. 
"Why  is  it  that  representatives  forget  the  interests  of  their 
own  section  and  stand  up  here  as  the  advocates  of  the  gold 
brokers  and  money-lenders  and  sharks,  the  same  class  of  men 
whose  tables  Christ  turned  over,  and  whom  he  lashed  out  of 
the  temple  at  Jerusalem?  .  .  .  Carry  out  the  theory  of 
the  contractionists  and  what  must  be  the  inevitable  result? 
Every  enterprise  and  industry  must  be  dwarfed  in  like  propor- 
tion. The  busy  hum  of  the  spindle  will  cease  its  sound  in  many 
a  mill  which  now  gives  employment  to  hundreds  of  active 
hands  and  supplies  the  comforts  of  life  to  many  a  happy  home. 
The  bright  blaze  of  many  an  iron  foundry  which  gives  life  and 
cheerfulness  to  the  grand  scenery  along  the  streams  of  Penn- 
sylvania will  cease  to  gild  the  night  with  its  rays.  And  the 
same  industry  in  my  own  State,  and  that  of  the  Senator  from 
Missouri,  which  has  been  so  rapidly  increasing  of  late,  will  be 
crippled,  and  hundreds  who  now  find  employment  there  will  be 
compelled  to  seek  a  home  elsewhere  for  want  of  work.  The 
undeveloped  resources  of  the  South  and  West,  which  we  have 
just  begun  to  appreciate,  will  rest  in  abeyance  until  a  wiser 
policy  shall  bring  them  into  use.  .  .  .  Why,  sir,  the 
people  were  never  freer  from  debt  in  proportion  to  the  business 
done  than  in  1865,  at  the  close  of  the  war,  when  Mr.  McCulloch 
began  his  system  of  contraction,  and  at  the  very  time  when 
eleven  millions  more  people  were  to  be  supplied.  Was  it  to  be 
supposed  that  the  activity  and  energy  which  the  adequate 
supply  of  money  had  put  in  operation,  and  which  was  giving 
prosperity  and  happiness  to  the  country,  would  suddenly  dwarf 
itself  to  suit  financial  notions  without  a  struggle?  The  inevit- 
itable  result  was  an  expedient  to  meet  the  consequent  want, 
and  credit  was  expanded.  At  the  very  moment  above  all  others 
when  adequate  supply  was  needed,  the  opposite  course  was 
adopted;  and  right  here  lies  the  true  cause  of  the  late  panic, 
wh  ch  resulted  from  a  money  famine  and  not  from  an  excessive 
supply.  .  .  .  Sir,  turn  this  matter  as  we  will,  and  look  at 
it  from  any  side  whatever,  and  it  does  present  tbe  appearance 
of  being  a  stupendous  scheme  of  the  money-holders  to  seize  the 
opportunity  of  placing  under  their  control  the  vast  industries 
or  the  nation.  Therefore  I  warn  Senators  against  pushing  too 
far  the  great  conflict  now  going  on  between  capital  and  labor. 
.  .  Capital  rests  upon  labor;  but  when  it  attempts  to 
press  too  heavily  on  that  which  supports  it  in  a  free  republic, 
the  slumbering  volcano,  whose  mutterings  are  beginning  al- 
ready to  be  heard,  will  burst  forth  with  a  fury  that  no  legisla- 
tion will  quell." 


176  The  Philo$ophy  of  Money. 

From  the  foregoing,  which  is  but  a  small  fragment  of  the 
immense  literature  in  harmony  with  the  opinions  cited,  the 
following  conclusions  may  be  digested: 

1.  A  diminished  volume  of  money  always  causes  a  propor- 
tional diminution  in  the  price  of  labor  and  commodities —or,  to 
express  it  otherwise,  money  becomes  dear  and  everything  else 
cheap. 

2.  This  redounds  to  the  advantage  of  the  capitalistic 
class,  who  are  thereby  enabled  to  exact  more  for  their  money 
in  services  and  commodities,  to  purchase  all  kinds  of  stocks 
and  properties  at  diminished  rates,  and  to  foreclose  mortgages 
and  collect  other  forms  of  debts  under  such  conditions  as  to 
make  "hard  times"  a  harvest  for  the  creditor  class. 

3.  The  debtor  class  is  compelled  not  only  to  yield  more 
services  and  commodities  for  the  money  which  it  receives  or 
has  previously  received,  but  suffers  the  further  hardship  of 
languishing  business  and  enforced  idleness  or  diminished  wages; 
and  it  should  bo  remembered  that  every  producer  is  a  debtor, 
even  though  he  has  no  specific  obligations  outstanding;  for  he 
will  have  to  aid  those  who  have  such  obligations  by  receiving 
lees  prices  and  wages  and  by  paying  relatively  increased  taxes, 
salaries,  rents  and  profits  to  those  members  of  the  debtor  class 
who  are  immediately  above  him  in  the  social  scale,  and  who 
will  seek  to  save  themselves  by  shifting  the  burden  of  their 
obligations  onto  those  who  are  below. 


"  ILL  fares  the  land,  to  hastening  ills  a  prey, 
Where  wealth  accumulates  and  men  decay. 
Princes  and  lords  may  flourish  and  may  fade; 
A  breath  can  make  them,  as  a  breath  has  made; 
But  an  honest  peasantry,  a  country's  pride, 
When  once  destroyed,  can  never  be  supplied." 

— Q-oldsmith. 
¥ 

"WEALTH  is  necessary;  let  us  not  disclaim  against  it;  every 
nation  needs  it  to  attain  the  highest  achievements  in  civil- 
ization. But  it  is  a  blessing  only  as  a  servant  and  is  destruc- 
tive as  a  master." — John  P.  Altgeld. 


)»  "/  am  astonished  at  nothing  in  our  business  life  so  much 
as  the  absence  of  an  earnest,  determined  endeavor  on  the  part 
of  our  men  of  brains  to  find  the  cause  of  these  chronic  crises 
and  hard  times  and  then  set  upon  the  traek  of  some  remedy 
tAerefor."—REV.  HEBER  NEWTON. 


A  BIRD'S-EYE  VIEW  OF  AMERICAN  FINANCIAL  HISTORY. 

% 

BY  SAMUEL  LEAVTTT. 

WHAT  may  well  be  called  the  American  system  of  money  naa 
been  gradually  evolved,  during  three  hundred  years,  from 
the  bitter  experiences  of  the  most  practical  people  that  ever 
trod  this  globe.  Franklin,  Jefferson,  Jackson,  Calhoun,  Clay. 
Gallatin  and  Benton  were  its  prophets.  But  it  first  began  to 
take  definite  shape  during  our  civil  war  under  such  men  as 
Edward  Kellogg,  Thaddeus  Stevens,  Henry  C.  Carey,  Stephen 
Colwell,  Pliny  Freeman,  Ben  Wade,  Oliver  P.  Morton,  Henry 
Wilson  and  John  Thompson;  and  later,  Warwick  Martin,  Peter 
Cooper,  Thomas  Ewing,  Wendell  Phillips,  John  E.  Williams, 
George  Opdyke,  John  G.  Drew,  John  P.  Jones,  William  D. 
Kelley,  B.  F.  Butler  and  others. 

What  first  strikes  the  observer  in  a  bird's-eye  view  is  that 
the  whole  modern  movement  toward  a  rational  money  system 
was  started  by  that  much  maligned  genius,  John  Law,  in 
France,  in  1715.  His  system  was  one  of  the  first  recent  revolts 
against  the  tyranny  of  metal  money.  He  was  the  real  founder 
of  the  Bank  of  France  and  the  present  French  system.  The 
Encyclopedia  Britannica  calls  him  an  "unequaled  financier." 
His  great  thought  was  plenty  of  government  paper  money,  and 
France  has  kept  that  thought.  Law  was  finally  beaten  by 
politicians  and  the  King's  mistresses,  when  he  tried  to  improve 
his  system. 

Turning  homeward,  we  find  the  first  American  coin  money, 
succeeding  the  wonderfully  useful  wampum,  came  very  curi- 
ously— coin  usually  does.  In  1652  a  mint  was  set  up  in  Boston  to 
coin  silver  into  "pine  tree"  money.  The  silver  came  mostly 

177 


178  American  Financial  History. 

from  the  West  Indian  trade.  Our  rulers  in  England  then,  as 
now,  only  busied  themselves  in  stealing  from  us  any  good 
money  we  could  get  hold  of.  Singularly  enough  we  depended 
largely  then  upon  another  class  of  pirates— the  buccaneers  of 
the  Spanish  Main,  who  spent  most  of  their  plunder  on  our 
shores,  where  were  the  nearest  civilized  ports.  This  was  a 
great  blessing — "a  blessed  providence"— to  our  Puritan  ances- 
tors, and  the  coin  money  economists  of  those  days. 

In  1745  we  had  another  blessed  influx  of  silver.  Governor 
Shirley,  of  Massachusetts,  and  his  pious  Puritans,  went  over  and 
captured  Louisburg,  Cape  Breton,  from  the  French,  with  fire 
and  sword,  and  made  a  big  loot.  This  so  tickled  Mother 
Britain  that,  for  once,  she  sent  us  a  lot  of  silver  to  "ransom" 
Louisburg.  This  enabled  Massachusetts  to  steal  away  the 
trade  of  Rhode  Island. 

In  1690  the  first  issue  of  paper  money  was  made  in  Massa- 
chusetts. This  was  before  the  establishment  of  the  Bank  of 
England.  It  was  for  £7,000.  In  1703  £15,000  was  issued, 
which  was  made  a  legal  tender  for  private  debts.  In  1716 
another  issue  to  the  amount  of  £150,000  was  authorized.  Mark 
the  style  of  it,  as  compared  with  the  wild-cat  projects  of  the 
present  Congress,  and  see  which  is  the  most  reasonable  and 
conservative,  and  then  inquire  if  the  Farmers'  Alliance  plan  is 
so  foolish:  "The  bills  were  to  be  distributed  among  the  differ- 
ent counties  of  the  province,  and  to  be  put  into  the  hands  of  five 
trustees  in  each  county,  to  be  appointed  by  the  legislature,  to 
be  let  out  on  real  estate  security  in  the  county,  in  specific 
sums,  for  the  space  of  ten  years,  at  five  per  cent,  per  annum." 
Another  act  for  £50,000  in  bills  was  passed  in  1720,  "which 
resulted  in  clearing  Massachusetts  "of  debt  in  1773 !" 

In  1723  Pennsylvania  led  a  number  of  States  in  issuing 
paper  money.  In  this  year  a  great  crisis  occurred  in  England, 
and  the  Bank  was  suspended.  The  coin  of  the  American 
colonies  was  required,  and  drawn  over,  in  England's  selfish  and 
peremptory  way,  to  prepare  the  bank  for  resumption.  All  coin 
left  Pennsylvania,  though  the  State  passed  lawa  raising  its 
value.  Then  the  State  issued  treasury  notes,  and  kept  them 
in  use  until  1773,  when  English  jealousy  caused  Parliament  to 


American  Financial  Hittory,  179 

make  all  such  issues  void.  Some  of  the  money  was  issued, 
says  Adam  Smith,  on  land  security  of  double  the  value,  and 
redeemed  in  fifteen  years.  It  was  made  legal  tender  and 
remained  at  par  with  coin  for  forty  years.  The  necessary 
notes  were  redeemed,  by  their  payment  for  taxes,  without  loss 
to  any  one.  This  is  the  familiar  history  of  Pennsylvania  and 
the  statement  of  Franklin.  The  cutting  off  of  this  money  was 
the  chief  cause  of  the  Revolution.  The  tea-party  in  Boston 
Harbor  was  only  a  side-show. 

Continental  money  was  issued  by  Congress  when  we  had 
no  government— no  power  to  tax.  Yet  if  made  full  legal 
tender,  with  no  mad  promise  of  coin,  fifty  million  dollars 
might  have  been  enough.  Gallatin  says:  "It  saved  the 
country;"  Jefferson,  "It  expired  without  a  groan;"  Calhoun, 
"It  is  the  ghost  conjured  up  by  all  who  wish  to  give  private 
banks  control  of  government  credit."  It  was  used  in  place  of 
a  war  tax,  and  the  people  BO  regarded  it. 

French  assign  ats  broke  the  spell  of  royal  tyranny  in 
Europe.  Such  is  the  power  of  a  live  nation  to  use  and  absorb 
money  that  nine  billion  dollars'  worth  of  it  was  issued  before  it 
broke  down.  Even  then  the  cause  of  the  tumble  was  that  it 
had  no  suitable  foundation.  It  was  founded  on  land  taken 
from  the  priests,  and  naturally  fell  when  that  land  was 
returned  to  the  churches. 

Our  Coin  for  a  Century. 

We  come  now  to  the  coin  money  of  the  last  half  of  the  eight- 
eenth and  the  first  half  of  the  nineteenth  century.  Through 
ignorance  of  it,  our  silver  folks  are  dismayed  by  the  fact  that 
BO  little  silver  was  coined  here  before  1878.  The  great  point  to 
be  shown  is  that  we  had  no  need  to  coin,  because  so  much 
came  from  abroad.  The  way  metal  money  flowed  here  during 
the  wars  between  England  and  Spain  reads  like  a  fairy  story. 
The  treasures  of  Mexico  and  South  America  passed  through 
here  and  gave  much  temporary  and  flitting  coin  deposits. 
Then  from  the  opening  of  the  Napoleonic  wars  until  1820  the 
most  of  Europe,  including  England,  was  using  paper  money, 
go  coin  came  and  stayed  here.  In  fact,  coin  stayed  back  in  our 


180  American  Financial  History. 

Western  wilds  often  when  it  was  scarce  in  Eastern  sections  and 
large  cities.  Through  all  smashes  and  wild-cat  times,  Western 
banks  paid  coin  until  1820.  Those  were  good  times  for  plant- 
ers on  new  soil.  The  old  Virginia  planter,  in  his  blue  swallow- 
tail coat  with  brass  buttons,  and  his  ruffled  shirt,  always  had 
a  pile  of  doubloons  in  his  desk.  He  did  not  know  that  Euro- 
pean war  and  paper  money  put  it  there. 

The  banks,  warned  by  wild-cat  experiences,  grasped  at  all 
coin  as  they  do  now  at  gold.  One  bank  sucked  all  there  was 
in  North  Carolina  and  owned  the  State.  It  was  so  plenty  in 
the  twenties,  in  New  England,  that  they  shipped  it  to  Europe. 

A  point  never  to  be  forgotten  by  silver  men,  in  answer  to 
the  gold  man's  statement  about  small  coinage  of  silver,  is  that 
from  the  foundation  of  the  United  States  money  laws  were 
passed  giving  legal  value  to  foreign  coins.  Our  mistaken  ratio 
of  16  to  1,  instead  of  15^£  to  1,  made  it  generally  useless  for  us 
to  coin  silver,  when  we  could  have  plenty  from  abroad  that  was 
legal  tender.  One  fact  alone  shows  how  immensely  we  were 
using  our  own  silver  and  foreign  silver  and  gold— viz.,  the 
panic  of  1857  was  largely  due  to  the  demonetization  of  our 
small  silver  and  those  foreign  coins.  In  1853  Congress  demon- 
etized all  silver  halves,  quarters  and  dimes  in  sums  of  over 
$5.00.  Much  of  the  reserves  of  the  banks  was  in  these  frac- 
tional silver  coins,  which  had  been  full  legal  tender,  and  in 
larger  gold  and  silver  coins  of  the  United  States  and  other 
countries.  The  silver  dollars  of  Spain,  Mexico,  South  America 
and  the  United  States  were  worth  a  premium  over  gold,  and 
were  bought  by  the  Rothschilds  and  sent  out  of  the  country, 
though  they  did  big  service  while  they  stayed  here.  But  the 
banks  did  not  hold  them  as  reserves.  So  the  demonetization 
of  our  small  silver  deprived  the  banks  of  a  large  portion  of 
their  reserves  and  of  paying  their  circulation  therein. 

Up  to  February,  1857,  all  foreign  gold  coins  and  the  silver 
coins  of  most  nations  were,  in  the  United  States,  full  legal  ten- 
der with  our  coins  at  the  values  fixed  by  our  laws;  and  gold 
being,  since  1834,  overvalued  in  the  United  States,  immense 
quantities  of  these  gold  coins  came  here  and  remained.  An- 
other reason  why  we  did  not  coin  silver  dollars  u  found  in  thia 


American  Financial  History.  181 

fact:  gold  was  superabundant.  These  gold  coins  were  also 
held  by  the  banks  as  reserves  in  large  quantities. 

But  on  February  21, 1857,  Congress  demonetized  all  foreign 
coins.  This  took  them  out  of  the  banks.  They  went  abroad 
never  to  return.  And  this  was  one  chief  cause  of  the  panic  of 
1857.  The  facts  above  given,  properly  circulated,  should  for- 
ever silence  the  quibbles  of  the  gold  men  about  the  non-use 
and  non-coinage  of  silver  up  to  1878.  From  1861  to  1878  we 
used  but  little  coin. 

The  gold  men  sneeringly  ask  if  we  want  to  go  on  a  50-cent 
dollar  like  Mexico.  It  is  true  they  have  worked  their  diaboli- 
cal will  on  some  of  those  weak  nations,  where  the  currency  is 
thrown  into  horrible  confusion  thereby,  and  foreign  business 
is  made  almost  impossible  by  the  rise  in  the  gold  dollar  to  a 
$2.00  dollar.  They  have  come  near  Mexicanizing  us  in  this 
respect,  but  have  failed  as  yet.  Their  plea  for  the  deposits  of 
workmen  in  savings  banks  is  like  the  howl  the  mortgage 
people  are  always  raising  about  the  poor  widows  and  orphans 
of  the  East,  to  whom  the  Western  farmer  should  willingly  pay 
high  interest.  Wise  nations  legislate  for  producers,  rather 
than  for  interest-suckers — male  or  female. 

United  States  Banks— Wild-Cat  and  State  Banks. 

Ever  since  the  Revolution  there  has  been  war  between 
Jefferson's  treasury  notes  and  the  sharp  fellows  who  wish  to 
collect  interest  on  their  debts.  In  the  lush  wild-cat  times 
bankers  did  not  care  whether  they  made  their  scoop  by  shov- 
ing out  bank  notes  so  far  that  they  would  hardly  ever  come 
back,  or  lending  interest-bearing  credit  to  their  neighbors. 
Now  the  telegraph,  railroad  and  redemption  banks  would 
make  hard  sledding  for  State  wild-cats. 

The  United  States  banks  (private)  were  so  mixed  with  the 
wild-cats  for  fifty  years — 1791  to  1841— that  they  need  describ- 
ing. The  first,  in  1791,  was  got  up  by  Federals  who  hated 
treasury  notes.  But  fortunately  there  was  much  honesty 
then,  and  it  was  so  managed  that  its  notes  were  like  full  legal- 
tender  greenbacks.  Those  were  halycon  days.  Wild  cats  were 
around,  but  got  little  game.  They  made  their  first  big  in- 


182  American  Financial  History. 

flation  in  New  England.  Tho  Yankees  thought  they  could 
•wing  out  to  any  degree  when  the  Anglo-Spanish  and  the  Napo- 
leon wars  made  coin  so  plenty  here. 

There  was  a  great  rush  of  banks  between  1811  and  1816, 
when  the  second  United  States  Bank  came  in.  It  was  a 
fraud  from  the  start,  violated  its  charter  and  was  founded 
mostly  on  personal  notes.  But  it  swung  its  twenty  years.  The 
great  plan  of  the  wild-catters  was  to  get  its  treasury  notes, 
good  as  gold,  and  drawing  interest,  for  their  red  dogs.  Right 
here  let  us  affirm  that,  for  short,  all  State  bank  money  may  be 
called  wild  cats,  red  dogs  and  shinplasters.  For  such  it  al- 
ways proves  in  panic  times.  The  Chicago  Tribune  says  that 
the  Democrats  are  "committed  upon  both  principle  and  tra- 
dition against  a  federal  currency— committed  aleo  to  State 
banking."  Not  so.  Jefferson  was  strong  for  federal  money,  i. 
e.,  treasury  notes.  The  Whigs  were  always  as  much  given  to 
wild  cats  as  the  Democrats.  Again  the  Tribune  tells  of  34,- 
000  who  took  the  benefit  of  the  bankrupt  act  in  1811-2-3,  but 
says  nothing  of  the  hundreds  of  thousands  who  failed  between 
1873  and  1890,  under  the  crush  of  Republican  gold  resumption, 
without  any  such  release.  Intelligent  Democrats  could  show 
billions  of  loss  from  Republican  financiering  against  hundreds 
of  millions  under  Democracy.  Give  the  poor  devil  Democrat 
his  due.  He  makes  a  clumsy  attempt  now  to  cover  his  rascal- 
ity in  voting  against  silver  bills  by  all  his  talk  of  returning  to 
wild  cats.  The  cheeky  Republicans  offer  no  shadow  of  a  real 
remedy  for  our  financial  ills. 

To  return  to  the  time  of  the  twenties.  The  new,  hopeful 
country  kept  having  booms  in  spite  of  bad  money.  After  the 
close  of  the  war  of  1812  15,  "Blessed  Peace,"  said  Matthew 
Carey,  "came  and  brought  two  thousand  merchant  buyers  to 
Philadelphia."  Fortunes  were  made.  It  was  funny  as  a  oir- 
ous.  The  brokers  stuffed  the  United  States  treasury  full  of 
ehinplasters,  not  good  thirty  miles  from  home.  Congress  said 
"resume"  in  1817.  Banks  said,  "Go  to  the  devil."  With  twen- 
ty-two millions  "on  hand,"  Congress  had  to  borrow  half  a  mill- 
ion to  keep  house  on.  The  big  bank  was  given  over  to  favor- 
ites, bribery  and  corruption,  but  ruled  th«  land.  There  was  a . 


American  Financial  History.  183 

whirligig  between  the  branches  of  the  big  bank  and  the  little 
banks.  The  latter  bought,  with  their  red  dogs,  from  the 
branches,  drafts  on  Eastern  cities.  The  drafts  bought  Euro- 
pean goods.  Meanwhile  the  branches  socked  it  to  the  wild- 
catters up  to  five  and  ten  per  cent,  a  month,  till  they  redeemed 
their  red  dogs  with  the  proceeds  of  another  crop. 

In  1818  the  president  of  the  big  bank  resigned  when  it 
was  near  ruin.  A  new  president,  Cheves,  saved  the  bank,  in 
the  Bank  of  England  fashion,  by  ruining  a  lot  of  small  banks 
and  merchants.  In  1820  came  "stay  laws"  and  a  "relief  sys- 
tem." Men  could  redeem  their  lands  and  negroes  in  two  years 
by  paying  ten  per  cent.  down.  North  Carolina  had  an  awful 
time.  Bobber  bankers  of  Newbern  became  the  practical  own- 
ers of  the  State,  and  sucked  its  blood.  Were  ruling  still  in 
1833. 

In  1825  the  great  Nick  Biddle  took  the  presidency  of  the 
bank,  and  ran  the  whole  country,  till  knocked  out  by  Jack- 
son. Biddle  was  the  biggest  boss  yet,  moved  crops,  lent  ten 
millions  at  a  time  to  the  government.  Some  thought  he  gave 
the  rising  sun  a  boost.  When  there  was  a  run,  he  only  allowed 
his  branches  to  cash  their  own  drafts.  In  1832  was  high  water 
time  for  this  fine  old  Philadelphia  gent.  President  Jackson 
who  hated  all  undemocratic  high-kicking,  made  him  pay  the 
government  debt  from  his  government  deposits.  Jackson 
stopped  the  abnormal  boom  in  wild  lands  by  his  "specie  circu- 
lar," ordering  only  specie  to  be  taken  for  United  States  lands. 
Then,  to  check  the  torrents  of  extravagance,  he  ordered  the 
useless  thirty-seven  millions  that  he  had  foolishly  put  in  State 
banks  distributed  back  to  the  people  of  the  States.  The  wild- 
catters paid  eighteen  millions,  and  then  all  broke,  beginning 
in  New  York  in  May,  1837.  That  was  a  grand  smash.  Jack- 
son had  a  glimpse  of  the  greenback  remedy  in  his  muddled 
head.  Jefferson  and  Calhoun  always  had  it. 

Parallel  with  all  this  was  the  Mississippi  tomfoolery  of 
1830  to  1840.  That  State  borrowed  thirty  millions  on  the  old 
personal  note  plan  from  Holland,  and  fooled  it  away  in  ten 
years.  Slaves  were  then  the  only  good  assets.  These  were  run 


184  American  Financial  History, 

off  to  Texas,  and  "Gone  to  Texas"  (G.  T.  T.)  was  a  familiar  in- 
scription. 

The  College  Professor  and  the  Facts. 

While  this  essay  is  intended  in  a  general  way  to  voice  the 
sentiments  of  the  Populists,  it  is  incidentally  an  answer  to  the 
speeches  of  Prof.  Laughlin  of  Chicago  University  before  the 
Sunset  Club  and  the  Bankers'  Association.  The  Professor's 
most  glaring  errors  were  concerning  the  greenbacks.  He  says: 

"It  seems  to  me  that  one  of  the  greatest  misfortunes  that 
this  country  ever  suffered  was  that  temporary,  and  to  the 
present  time  lasting,  intoxication  connected  with  the  issue  of 
United  States  notes  or  greenbacks.  From  the  foundation  of 
our  government  in  1789  to  February,  1862,  the  United  States 
government  never  issued  any  paper  money." 

The  Chicago  Herald  of  December  10  voiced  the  same 
falsity  thus: 

"In  fact  the  government  never  did  anything  of  the  kind 
until  1862,  when  Congress  authorized  an  issue  of  legal-tender 
notes." 

Are  these  men  simply  reckless  liars,  or  are  they  ignorant 
of  the  facts?  Here  are  the  facts:  From  1812  to  1860,  U.  S. 
treasury  notes  were  issued  at  least  twenty  times;  that  is,  in 
every  time  of  emergency,  when  the  bankers'  wild-cat  money 
could  not  possibly  keep  business  going.  These  notes  were  re- 
ceivable for  all  debts  due  the  government,  including  interest 
on  the  public  debt  and  custom-house  dues;  and  that  fact  made 
them  universally  acceptable  by  the  people — better  than  gold. 
In  these  respects  they  were  better  than  the  greenbacks;  for 
never  until  the  infernal  exception  was  put  upon  them  in  1862 
did  the  government  refuse  to  receive  its  own  treasury  notes. 

Here  are  most  of  the  dates  and  amounts  of  those  issues — 
all  by  acts  of  Congress  readily  traced:  June  3,  18  2,  $5,000,- 
000;  February  25, 1813,  $10,000,000;  March  4,  1814,  $10,000,000; 
December  26,  1814,  825,000,000;  February  14, 1815,  $25,000,000; 
October  12,  1837,  $10,000,000;  March  21, 1838,  $10,000.000;  May 
31, 1840,  $5,000,000;  June  30, 1842,  $5,000.000;  August  31,  1842, 
$6,000,000;  July  22, 1816,  $10,000,000;  June  28,  1847,  $23,0^0,000; 
December  23, 1857,  $20,000,000;  December  17,  i860,  $10,000,000, 


American  Financial  History.  185 

Is  that  lie  nailed  ?  The  above  treasury  notes  were  ham- 
pered in  various  ways.  The  money-lenders  persuaded  Con- 
gress that  it  would  be  "contrary  to  the  laws  of  the  Modes  and 
Persians"  if  the  notes  drew  no  interest.  So  they  were  gener- 
ally heavily  handicapped  in  that  way.  Sometimes  they  only 
drew  one  mill  per  annum,  sometimes  nothing.  When  they 
drew  none  the  Shylocks  at  once  cried  that  the  country  was 
ruined.  They  liked  them  well  enough  plus  interest,  because 
they  were  sharp  enough  to  get  hold  of  them  and  pull  in  the 
interest,  while  they  managed  to  cram  the  U.  S.  treasury  full  of 
their  wild-cat  stuff. 

To  thoroughly  verify  these  serious  statements,  let  us  look 
at  the  statutes  under  which  these  issues  were  made  and  the 
particulars  of  their  issue: 

Act  of  June  3, 1812  (Statutes  2,  p.  766).— This  law  author- 
ized the  issue  of  $5,000.000  treasury  notes,  to  run  one  year, 
bearing  five  and  two-fifths  per  cent,  interest.  They  were  made 
receivable  for  all  debts  due  the  government,  and  were  to  be 
paid  to  such  public  creditors  and  other  ^persons  as  were  will- 
ing to  receive  them.  They  might  also  be  used  to  procure 
loans,  or  might  be  placed  to  the  credit  of  the  treasury  in  banks 
at  par  and  accrued  interest. 

Act  of  February  2.5,  1813  (Statutes  2,  p.  801).— This  law 
authorized  the  issue  of  $10,000,000  treasury  notes  to  mature 
in  one  year,  bearing  five  and  two-fifths  per  cent,  interest  per 
annum.  Terms  same  as  act  of  June  3,  1812. 

Act  of  March  4, 1814  (Statutes  3,  p.  100).— Authorized  an 
issue  of  $10,000,000  on  same  terms  as  above.  No  charge  to  the 
government  was  to  be  made  by  the  banks  which  credited  the 
notes. 

Act  of  Dec.  26, 1814  (Statutes  3, p.  I&/).-Authorized  the  issue 
of  $25,000.000  treasury  notes  in  place  of  a  loan  of  $25,000,000 
previously  authorized.  Ten  million  of  these  notes  were  to  be 
applied  to  the  payment  of  glO.000,000  previously  borrowed. 
Otherwise  they  were  like  the  above. 

Act  of  February  14,  1S15  (Statutes  3,  p.  213).—  This  law 
authorized  the  issue  of  $25,000,000  treasury  notes  in  addition 
to  other  issues.  Up  to  this  time  the  Secretaries  of  the  Treaa- 


)96  American  Financial  History. 

ury,  Mr.  Gallatin  and  Mr.  Crawford,  had  complained  that  the 
treasury  notes  so  far  issued  were  made  too  large  for  common 
circulation,  though  their  standing  among  the  people  was  good, 
and  the  people  were  desirous  of  having  them.  They  say  treas- 
ury notes  have  taken  the  place  of  coin  and  equalized  the  ex- 
change throughout  the  country.  To  meet  the  wishes  of  these 
Secretaries  and  of  Jefferson  and  Madison,  as  well  as  the  people, 
these  $25,000,000  treasury  notes  for  circulation  were  author- 
ized and  issued.  The  most  of  them  were  required  to  be  less 
than  $100  in  denomination,  and  to  be  payable  to  bearer, 
while  those  of  $100  and  over  were  to  be  made  payable  to 
order  and  to  pay  by  endorsement,  and  were  to  bear  five  and 
two-fifths  per  cent,  interest.  The  smaller  ones  were  to  bear 
no  interest.  They  were  also,  for  the  first  time,  made  receivable 
for  six  per  cent,  bonds.  They  were  made  to  circulate  as  mon- 
ey, and  to  have  the  characteristics  of  coin,  but  they  were  not 
redeemable  therein.  They  were  legal  tender  to  the  United 
States.  These  notes,  after  being  paid  into  the  treasury,  were 
to  be  reissued. 

When  these  $25,000,000  treasury  notes  of  small  denomi- 
nations were  made  to  circulate  as  money,  and  to  bear  no  in- 
terest, the  indignation  of  all  the  banks  in  the  country  was 
aroused.  They  saw  that  if  those  notes  went  out  "among  the 
people,  and  became  the  money  of  the  country,  there  would  be 
an  end  to  the  circulation  of  bank  notes.  Such  was  the  truth. 
There  was,  therefore,  a  general  combination  in  New  England, 
New  York,  Delaware  and  Pennsylvania  to  kill  them  off.  The 
old  Bank  of  the  United  States,  chartered  in  1791,  the  charter 
of  which  expired  and  which  was  not  renewed  in  1811,  was  then, 
as  the  law  allowed,  closing  up  its  affairs.  The  debts  of  the 
people  to  this  bank  were  very  large.  The  bank  was  pressing 
for  payment.  The  people  presented  these  treasury  notes, 
which  did  not  bear  interest,  in  payment.  The  bank,  to  destroy 
the  credit  of  the  notes,  and  to  force  the  recharter  of  a  national 
bank,  refused  to  receive  the  notes  of  the  government  in  pay- 
ment to  the  bank.  As  the  bank  would  not  receive  the  notes 
from  the  merchants,  the  merchants  were  reluctantly  corn- 
palled  to  refuse  to  receive  them  for  debts  due  and  for  good*  sold. 


American  Financial  Hiitory.  1ST 

The  New  England  banks,  and  those  of  Delaware,  were  also 
deeply  involved  in  this  conspiracy  to  destroy  the  credit  of  these 
treasury  notes,  as  all  such  are  now.  The  embargo  and  non- 
intercourse  laws  of  Jefferson  and  Madison  had  destroyed  the 
carrying  trade  of  New  England,  and  had  caused  a  suspension 
of  the  New  England  banks  in  1809  and  1810.  The  people  of 
New  England  were,  therefore,  greatly  opposed  to  the  war  with 
England.  They  did  all  they  could  to  cripple  the  government 
in  carrying  it  on.  They  refused  all  loans,  even  of  bank  notes, 
and  were  very  hostile  to  all  treasury  notes,  especially  to  those 
intended  to  take  the  place  of  bank  notes,  as  were  those  of  1815. 

By  a  general  combination  between  State  banks,  the  old 
national  bank  bondholders  and  bullion  brokers,  these  notea 
of  the  United  States  were  forced  to  a  discount  for  a  short  time. 
One  of  the  strongest  arguments  in  favor  of  having  all  treasury 
notes  made  full  legal  tender  is  here  presented.  Had  they  been 
legal  tender  to  the  people,  as  well  as  to  the  government,  all  the 
efforts  of  the  banks  and  brokers  to  reject  them  and  reduce 
their  value  would  have  been  fruitless.  If  the  legal  character 
were  removed  from  the  greenbacks  the  national  banks  would 
at  once  discredit  them  today. 

Immediately  after  these  efforts  of  the  banks  to  discredit 
treasury  notes,  an  application  was  made  to  Congress  for  a 
charter  for  another  U.  S.  Bank,  which  proposed  to  take  from 
the  government,  as  part  of  its  capital,  $15,000,000  of  these  same 
treasury  notes,  to  withdraw  them  from  competition  with  bank 
notes.  (Just  as  the  rascally  conspirators  at  Washington  are 
now  trying  to  do  with  346  million  greenbacks.) 

Mr.  Madison  vetoed  the  bill,  principally  on  account  of  this 
provision.  But  $28,000,000  of  bonds  were  substituted  for  treas- 
ury notes,  as  capital  of  the  bank;  and  by  a  combination  of  the 
Federal  party  and  a  few  Democrats  it  was  chartered.  The 
charter  provided  that  no  other  such  bank  should  be  chartered 
by  Congress  for  twenty  years.  This  implied,  also,  that  all 
treasury  notes  intended  to  circulate  as  money  should  be  with- 
drawn, and  that  this  bank  should  furnish  all  the  national  paper 
circulation  for  twenty  years. 

For  this  privilege  the  bank  paid  $1,500,000,    This  contract 


188  American  Financial  History. 

on  the  part  of  the  government  was  disgraceful,  but,  having 
been  made,  it  had  to  be  carried  out;  and  it  was  carried  out, 
as  the  following  acts  of  Congress  show: 

The  Act  of  March  3, 1817  (Statutes  3,  p.  377).— The  second 
Bank  of  the  United  States  had  just  gone  into  operation.  Con- 
gress was  compelled  to  comply  with  its  part  of  the  contract  It, 
therefore,  passed  this  law,  which  repealed  all  laws  authorizing 
the  reissue  of  the  "treasury  notes  of  1815."  But  the  people 
had  these  government  notes,  and  they  preferred  them  to  bank 
notes  or  coin.  They  knew  that  the  repeal  of  the  law  authoriz- 
ing their  reissue  could  not  affect  the  value  of  those  then  in 
their  bands,  for  a  valuable  consideration  paid  the  government. 
They,  therefore,  held  on  to  the  notes  (as  our  people  should 
now,  in  spite  of  Sherman,  Cleveland  &  Co.)  Instead  of  paying 
them  into  the  treasury,  where  the  law  required  them  to  be 
destroyed,  the  people  held  onto  them,  and  used  them  in  busi- 
ness, greatly  to  the  annoyance  of  the  bank  and  ot  the  Secre- 
tary of  the  Treasury,  then  a  bank  man  (Mr.  Dallas).  This 
officer  ordered  the  collectors  of  revenue  to  refuse  to  receive 
these  notes  for  duties  on  imports,  supposing  that  by  this  means 
he  could  injure  their  credit  and  force  their  presentation  at  the 
treasury  for  payment  in  coin  or  national  bank  notes,  that  they 
might  be  canceled.  This  gave  rise  to  a  suit  in  Boston.  A 
firm  presented  treasury  notes  in  payment  of  duties  on  imports, 
for  which  the  law  creating  them  provided  that  they  should  be 
received.  The  government  refused  to  receive  them,  and 
brought  suit  for  the  duties.  The  defendants  pleaded  a  tender 
of  treasury  notes.  The  government  answered  that  they  were 
not  legal  tender.  Judge  Story,  in  1819,  heard  the  case,  and 
decided  for  the  defendants.  The  decision  is  that  "Treasury 
notes  are  legal  tender  for  everything  for  which  the  govern- 
ment makes  them  receivable."  This  decision  ia  in  2  Mason, 
pages  1  to  18.  This  decision,  though  against  the  government, 
was  never  appealed  to  the  Supreme  Court.  It,  therefore 
stood  as  the  law  of  the  land. 

The  Act  of  May  3, 1822  (Statutes  3,  p.  675).— Treasury  notes 
etill  remained  out  among  the  people,  to  the  annoyance  of  the 
bank  and  the  Secretary.  The  decision  of  Judge  Story  raised 


American  Financial  History.  189 

instead  of  depressing  them  in  the  estimation  of  the  people,  and 
increased  the  anxiety  of  the  bank  and  the  Secretary  respecting 
them.  The  notes  did  not  come  to  the  treasury  for  destruction. 
(Just  so  the  people  acted  when  John  Sherman  tried  to  make 
them  take  5-20  bonds  and  give  up  the  greenbacks.)  They  re- 
mained among  the  people  until  May  3, 1822,  when  Congress  again 
came  to  the  rescue  of  the  bank  and  passed  the  law  of  that  date 
which  provided  that  these  treasury  notes  should  not  be 
received  by  any  collector  of  revenue  in  the  United  States,  and 
that  they  should  be  received  and  paid  at  the  treasury  only. 
All  that  came  into  the  treasury  were  to  be  destroyed.  The 
people  wished  to  retain  these  notes;  but  the  bank  forced  Con- 
gress to  act  against  them;  and  Congress,  by  destroying  their 
receivability,  compelled  their  surrender  by  the  people.  We 
hear  no  more  of  treasury  notes  thereafter  until  1837,  when,  as 
usual,  the  necessities  of  the  government  again  called  them  into 
being. 

The  Aot  of  October  12, 1837  (Statutes  5,  p.  201).— The  banks 
had  all  suspended,  with  nearly  $40,000,000  government  funds. 
Not  one  year  before  the  law  had  made  these  banks  public 
depositories,  with  their  promise  that  they  would  always  pay 
coin  for  all  liabilities.  The  government  had,  in  1835,  paid  off 
the  last  dollar  of  the  national  debt.  The  surplus  then  in  the 
treasury  was  near  $40,000,000.  This  was  in  the  banks.  The 
government  had  no  money  to  pay  ordinary  expenses,  unless  the 
treasury  used  suspended  bank  notes.  This  Mr.  Van  Buren, 
the  President,  refused  to  do.  He  called  Congress  together  to 
meet  the  emergency.  Its  remedy  for  the  emergency  was  treas- 
ury notes  (as  it  should  now  be),  which  Jefferson  says  are  the 
only  reliance  of  a  nation.  This  act  of  October  12, 1837,  provided 
for  the  issue  of  $10,000,000  treasury  notes,  in  denominations 
not  less  tnan  850,  running  one  year.  The  law  left  the  inter- 
est which  they  were  to  bear  discretional  with  the  President 
and  the  Secretary  of  the  Treasury;  but  in  no  case  was  it  to 
exceed  six  per  cent.  Congress  appeared  too  timid  to  make 
these  notes  money  bearing  no  interest.  The  Secretary,  know- 
ing that  the  people  needed  them  as  money,  complied  with  the 
law  by  making  many  of  them  bear,  one  mill  interest  per  annum. 


190  American  Financial  History. 

As  such  they  circulated  freely  as  money,  and  the  people  were 
delighted  to  get  and  use  them.  They  answered  all  the  pur- 
poses of  coin,  and  equalized  the  exchanges  throughout  the 
country.  The  banks  did  not,  at  that  time,  possess  sufficient 
power  to  injure  them.  Men  now  living  remember  them  and 
their  usefulness,  although,  imitating  the  foolishness  of  the  Bank 
of  England,  they  were  never  paid  out  of  the  treasury  but  once. 

The  Act  of  May  21,1838  (Statutes  5,  p,  228).— This  act 
authorized  the  reissue  of  the  $10,000,000  treasury  notes  issued 
under  the  act  of  1837,  which  had  been  canceled.  They  should 
have  been  used  till  worn  out,  and  then  replaced  ad  infinitum. 
It  has  taken  time  and  a  great  war  to  open  the  eyes  of  the  peo- 
ple and  Congress  to  see  what  Jefferson  saw  in  1813.  And  now, 
again,  many  are  forgetting  the  facts. 

The  Act  of  May  31, 1840  (Statutes  5,  p.  370).— This  law 
renews  the  act  of  1837,  relating  to  the  issue  of  treasury  notes, 
and  makes  the  following  modifications:  1.  That  they  were  to 
be  issued  in  place  of  those  redeemed;  not  to  exceed  in  this  issue 
$5,000,000.  2.  They  were  to  be  redeemed  in  less  than  a  year, 
if  the  treasury  was  in  a  condition  to  redeem  them.  3.  When 
ready  to  redeem  them,  the  Secretary  of  the  Treasury  was  to 
give  notice.  4.  After  due  notice,  these  notes  should  cease  to 
bear  interest,  if  they  remained  out.  This  act  was  to  continue 
only  one  year.  It  is  evident  that  Congress  supposed  the 
necessity  for  issuing  treasury  notes  would  soon  cease.  But  it 
was  mistaken,  Treasury  notes  continued  to  be  issued  up  to 
1818. 

The  Act  of  July  4, 1840  (Statutes  5,p.  385).— This  was  the 
first  Independent  Treasury  act  of  the  days  of  Van  Buren.  It 
had  good  features,  but  was  badly  bungled.  The  money  of  the 
government  was  to  be  kept  by  the  government  (instead  of  the 
banks),  in  the  mints,  custom-houses,  post-offices  and  treasury 
building.  The  fool  part  of  it  was  that  after  January  3, 1843,  no 
payment  should  be  made  to  the  government  in  anything  but 
gold  and  silver  coin.  The  banks  were  suspended.  The  gov- 
ernment was  being  sustained  by  treasury  notes.  But  still 
this  law  provided  that  after  Jan.  3, 1843,  treasury  notes  should 
be  excluded  from  th«  treasury  as  well  as  bank  notes.  An  ap- 


American  Financial  History.  191 

peal  was  made  to  the  people  in  that  year's  election,  upon  this 
law,  and  Van  Buren  and  his  coin  payments  were  knocked  out 
by  Harrison  with  wiser  plans. 

The  Act  of  July  21,  1811  (Statutes  5,  p.  438)—  This  was 
among  the  first  Whig  acts,  and  they  in  turn  made  fools  of 
themselves.  They  favored  a  national  bank,  but  opposed  treas- 
ury notes.  The  law  provided  for  the  issue  of  $12,000,000  six 
per  cent,  bonds.  The  principal  purpose  was  to  redeem  the 
good  treasury  notes  of  the  Democrats.  A  Pittsburg 
man  was  sent  to  England  to  sell  the  bonds.  Though  the 
United  States  had  paid  its  national  debt  in  1835,  the  bonds 
were  no  go.  The  Whigs,  having  failed  to  found  a  bank  and 
sell  these  bonds,  were  compelled  to  rely  upon  the  much-de- 
spised treasury  notes  of  the  Democrats. 

The  Act  of  April  15, 1842  (Statutes  5,  p.  473),  was  a  final 
effort  to  shove  the  bonds.  They  were  increased  to  $17,000,000, 
the  time  extended  indefinitely  up  to  twenty  years.  They  could 
be  sold  at  less  than  par.  The  rich,  strong  young  nation  could 
not  doit,  though  taxes  and  duties  were  pledged  for  payment. 
The  war  was  going  on  between  the  Whig  Congress  and  sen- 
sible President  Tyler.  The  latter  advocated  the  issuing  of  all 
the  paper  as  well  as  metallic  money  by  the  government;  but 
Congress  wished  the  money  issued  by  a  national  bank.  The 
President  vetoed  the  bank  bill.  Congress,  by  way  of  heading 
him  off,  passed  the  act  to  make  treasury  notes  bear  six  per 
cent,  interest,  to  hinder  their  being  used  as  money. 

The  Act  of  June  30,  1842  (Statutes  5,  p.  766)— This  pro- 
vided for  $5,000.000  treasury  notes  to  run  one  year.  Interest 
five  per  cent.  Otherwise  like  most  of  the  others,  as  to  legal 
tender,  payment  to  public  creditors  and  placing  them  in  banks. 

The  Act  of  Aug.  31, 1842  (Statutes  5,  p.  581),  shows  a  linger, 
ing  hope  of  selling  the  bonds.  If  not  successful,  the  govern- 
ment was  to  issue  $6,000,000  more  of  treasury  notes  (trotting 
out  the  despised  pack-mule  again),  which  might  even  be  re- 
issued. What  a  let-up!  Br'er  Fox  Sbylock,  he  lie  low! 

The  Act  of  March  3, 1843  (Statutes  5,  p.  614),  authorizes 
the  issue  of  new  treasury  notes  to  supply  the  place  of  thow 
redeemed. 


192  American  Financial  History. 

The  Act  of  July  22, 1846  (Statutes  5,  p.  39),— The  Democrats 
resumed  power  in  1845.  This  act  authorizes  $10,000,000  treas- 
ury notes  in  place  of  those  destroyed. 

The  Act  of  August  6, 1846  (Statutes  9,  p.  59),  finally  estab- 
lished the  independent  treasury  on  a  sensible  basis.  It  made 
all  treasury  notes  and  gold  and  silver  coins  equal  in  payment 
of  all  debts  to  the  government.  This  held  till  1861,  and  many 
of  the  provisions  are  still  law,  but  badly  enforced,  as  when  our 
recent  Presidents  deposited  many  millions  in  banks. 

The  Act  of  Jan.  28,  1847  (Statutes  9,  p.  118),  authorized 
$23,000,000  (more  than  $500,000,000  now)  to  fight  the  Mexican 
war.  No  interest  was  fixed.  They  mostly  drew  one  mill,  and 
the  people  gladly  used  them  as  money. 

The  Act  of  Dec.  23,  1857  (Statutes  11, p.  257),  provides  for 
$20,000,000  treasury  notes  to  take  the  place  of  coin,  the  banks 
having  suspended  with  the  coin  in  their  vaults.  (Heaven,  or 
something,  generally  saves  the  banks.)  These  were,  like  most 
of  the  previous  issues,  with  nominal  interest.  The  plain  people 
took  them  gladly. 

The  Act  of  Dec.  17, 1860  (Statutes  11,  p.  121),  provides  for 
$10,000,000  treasury  notes,  running  one  year,  at  six  per  cent. 
The  interest  was  to  run  and  the  notes  remain  out  until  sixty 
days  after  notice  of  readiness  to  redeem.  Otherwise  they  had 
the  old  provisions. 

The  Act  of  Feb.  8, 1861,  authorized  the  issue  of  treasury 
notes,  or  a  loan  of  $25,000,000  to  take  up  treasury  notes. 

The  Act  of  March  2, 1861  (Statutes  12,  p.  178),  provides  for 
a  loan  of  $10,000,000  to  takfi  up  treasury  notes,  and  for  govern- 
ment expenses.  Same  old  story.  If  bonds  not  sold, — then 
more  notes. 

This  brings  us  to  the  act  of  July  17, 1861,  when  the  gigantic 
$250,000,000  of  loans  and  notes  came  up.  The  further  history  is 
well  known.  That  just  given  will  surprise  those  who  thought 
treasury  notes  began  with  the  rebellion. 

Safety  Fund— Suffolk  and  Redemption  Banks. 

As  many  of  the  foolish  propositions  now  put  forth  for  "re- 
forming the  currency"  are  only  feeble  imitations  of  the  Safety 


American  Financial  History.  193 

Fund,  Suffolk  System  and  Redemption  Bank  System  that 
arose  before  the  Rebellion,  a  brief  account  of  them  will  be  giv- 
en here.  In  the  thirties  and  forties  there  were  as  many  so-called 
systems  as  there  were  States.  The  Suffolk  System  of  Massa- 
chusetts, among  those  first  started,  alone  deserved  the  name 
of  system.  In  1829  that  State  decreed  that  no  bank  should 
operate  unless  50  per  cent,  of  its  capital  was  paid  in  coin.  Notes 
must  not  exceed  25  per  cent,  of  the  capital.  Liabilities,  ex- 
cept deposits,  must  not  exceed  twice  the  capital.  Such  pro- 
visions, however,  amounted  to  little,  because,  much  of  the 
loans  being  simple  credits,  there  was  small  inducement  in  the 
strong  banks  to  overissue  notes.  As  no  provision  was  made 
for  reserves,  the  coin  to  set  a  bank  in  motion  could  be  bought 
ana  sold  again  right  after  the  organization.  The  Redemption 
system,  afterward  adopted,  was  much  better,  but,  as  will  be 
•hown,  only  a  harm  in  panic  times. 

The  New  York  banks  were  placed  mostly  in  New  York  City 
and  the  Hudson  River  towns.  In  1829  the  Safety  Fund  Sys- 
tem arose  there.  It  allowed  the  banks  under  it  to  issue  notes 
to  twice  the  amount  of  their  paid-up  capital,  and  loans  to  twice 
and  a  half  the  amount.  Every  bank  under  it  had  to  pay  the 
State  Treasurer,  annually,  one-half  of  one  per  cent,  upon  its 
•hare  capital — these  payments  to  continue  till  each  bank  had 
a  sum  equal  to  three  per  cent,  of  its  share  capital.  The 
amounts  so  paid  were  to  be  held  as  a  common  fund  for  the 
discharge  of  notes  or  other  liabilities  of  any  bank  of  the  system. 

In  1841  and  1842  eleven  of  the  Safety  Fund  banks  failed, 
making  a  loss  to  the  creditors  of  $2,588,933.  The  fund  was 
then  $86,274.  The  whole  amount  of  the  fund  to  September  30, 
1848,  was  only  $1,876,063.  The  balance  of  the  loss  was  pro- 
vided by  the  State — which  was  to  be  reimbursed  by  further 
additions  to  the  fund.  That  was  very  nice  for  the  banks.  In 
1842  the  act  was  so  amended  that  the  fund  became  chargeable 
only  with  the  losses  to  the  public  on  the  note  circulation,  just 
as  it  is  the  case  with  the  national  banks  now. 

In  1838  New  York  founded  the  "Free  Banking  System,"  by 
which  banks  could  be  formed  without  application  to  the  legis- 
lature. These  associations  were  required  to  deposit  with  the 


194  American  Financial  History. 

State  Comptroller  United  States  or  State  stocks  equal  to  a  five 
per  cent,  stock;  or  bonds  and  mortgages  on  improved  real 
estate  worth  twice  the  sum  secured,  and  equal  in  amount  to 
their  note  circulation.  The  Comptroller  issued  the  notes  to 
them.  Up  to  1843  twenty-nine  of  these  banks  failed — circula- 
tion $1,233,374;  nominal  value  of  securities,  $1,555,338.  These 
produced  $953,371,  or  74  per  cent,  of  the  circulation  secured. 
The  law  was  then  amended  to  exclude  all  but  United  States 
stocks,  and  those  of  the  State,  which  must  be  equal  to  six  per 
cent. 

A  wiser  provision  had  been  adopted  in  1840,  requiring  all 
the  State,  banks  to  redeem  their  notes,  either  in  New  York 
City,  Albany  or  Troy,  at  a  discount  of  one-half  of  one  per 
cent.  In  1851  this  discount  was  reduced  to  one-quarter  of  one 
per  cent.  After  1851  two  New  York  banks  started  the 
Redemption  System.  The  notes  of  such  of  the  country  banks 
as  kept  deposits  with  them  were  returned,  the  redeeming 
banks  dividing  the  discounts  between  themselves  and  the 
issuers.  This  system  was  useful,  as  it  forced  a  constant 
redemption;  but  see  how  it  worked  io  1857. 

After  1838  no  more  Safety  Fund  banks  were  chartered,  and 
the  system  gradually  lapsed.  But  a  curious  story  could  be 
told  of  how  it  ran  through  the  West.  That  region  was  deluged 
with  "safety"  money — all  but  the  safety.  In  1846  the  new  Con- 
stitution of  New  York  took  from  the  legislature  all  power  to 
pass  any  act  granting  any  special  charter  for  banking  purposes; 
such  organizations  to  be  under  general  laws.  After  1850 
bank  stockholders  were  to  be  liable  to  the  amount  of  their 
shares  for  all  the  debts,  and  holders  of  notes  to  be  preferred 
creditors. 

Now  for  the  Redemption  Banks  in  1857.  These  banks, 
useful,  in  their  way,  in  ordinary  times,  did  harm  in  that  panic. 
A  few  years  before  a  new  source  of  profit  was  suggested  to 
some  New  York  banks.  If  the  redemption  that  was  distributed 
among  the  money-brokers  could  be  monopolized  by  one  or  two 
institutions,  it  would  yield  a  rich  revenue;  and  it  could  easily 
be  attracted  by  reducing  the  rates  of  redemption  so  low  as  to 
exclude  individual  competition.  The  system  was  based  some- 


American  Financial  History.  195 

what  upon  the  Suffolk  System.  Coupled  with  the  payment  of 
interest  on  country  deposits,  it  had  grown  into  astonishing 
activity  before  1857.  It  worked  admirably  as  a  piece  of 
machinery,  with  the  popular  commendation  that  it  restricted 
the  bank  currency  by  enforcing  prompt  redemption,  and  saved 
the  merchants  a  heavy  brokerage.  It  was  a  great  convenience 
in  the  first  days  of  the  panic,  when  private  capital  was  with- 
drawn from  the  purchase  of  currency,  and  when  the  mer- 
chants, but  for  the  redeeming  banks,  would  have  been  over- 
burdened with  unavailable  notes. 

But  the  redemption  system,  like  everything  else  that  was 
susceptible  of  abuse,  was  turned  aside  from  its  legitimate  pur- 
pose and  made  to  answer  a  mischievous  end.  The  low  rate  at 
which  the  bills  were  taken  in  New  York  accelerated  their 
return  in  bulk,  as  a  basis  of  exchange,  or  for  credit  in  account. 
Thus  their  distinctive  character  as  circulation  was  in  a  great 
measure  destroyed.  The  cheap  redemption,  so  desirable  in  a 
common  state  of  the  market,  became  virtually  a  premium  on 
the  currency  of  New  York.  The  tendency,  then,  was  to  take 
it  out  of  a  healthful  circulation,  and  throw  it  back  to  its 
source,  whereby  it  profited  nobody  so  much  as  the  stock- 
holders of  the  express  companies.  The  country  banks  might 
keep  their  own  bills  in  a  perpetual  circulation,  by  exchanging 
them  with  each  other,  and  thus  creating  a  trade  in  them. 
The  same  packages  were  not  unfrequently  kept  unopened  in 
the  circuit,  and  reissued  in  bulk,  as  often  as  they  were  needed 
to  supply  balances. 

In  a  panicky  time  such  redeeming  banks  must  either  put 
more  capital  into  the  service  or  reject  the  bills.  In  1857,  in 
spite  of  the  best  management,  the  currency  circuit  was  kept 
up;  the  bills  of  one  bank  were  paid  for  the  bills  of  all  the 
others. 

Another  evil  arose  from  these  banks.  The  credit  given  to 
an  unsecured  currency  by  their  indorsement  gave  it  a  wide 
circulation,  to  the  displacement  of  bills  that  were  based  upon 
State  and  United  States  stocks.  It  was  now  seen  that  this 
credit  had  no  other  basis  than  a  current  deposit  by  the  issu- 
ing bank,  which  deposit  was  in  very  small  proportion  to  its 


19f  American  Financial  History. 

outstanding  bills;  and  that  the  redeeming  bank  was  prompt  to 
the  hour  in  repudiating  those  bills  if  the  deposit  was  not 
maintained.  This  was  a  fallacious  credit,  entirely  independent 
of  the  separate  ability  of  the  issuing  banks.  The  general 
result  was  that  biHs  were  likely  to  fail  in  transit,  and  they 
would  not  then  be  admitted  as  a  deposit,  which  would  involve 
the  rejection  of  others.  And  so  the  row  of  bricks  began  to 
tumble  in  both  directions. 

There  was  no  incident  of  that  panic  that  spread  its  terrors 
abroad  with  such  sure  and  rapid  steps  as  the  rejection,  by  the 
redemption  banks,  of  bills  which  they  had  been  accustomed 
to  receive  on  deposit.  If  it  had  been  possible  to  remove  all 
other  causes  of  excitement,  that  alone  would  probably,  have 
involved  the  suspension  of  specie  payments.  It  filled  all  the 
shops  of  the  country  with  alarm.  It  created  mobs  in  the  sav- 
ings banks,  and  pushed  forward  the  panic,  by  exciting  the 
fears  of  the  multitude. 

The  Example  of  France. 

Professor  Laughlin  has  the  gall,  as  few  of  his  confreres 
have,  to  appeal  to  "the  example  of  France"  after  the  Prussian 
war  of  1871,  in  not  "interfering  with  her  media  of  exchange." 
It  is  hard  to  tell  whether  his  statement  is  based  upon  impu- 
dence or  ignorance.  She  interfered  with  all  the  ideas  of  pro- 
priety entertained  by  his  clique  in  a  way  that  has  been  secretly 
their  despair  ever  since.  Yet  hear  his  glorification  of  a 
scheme  that  cuts  all  the  ground  from  under  him.  He  says: 

"Prance  borrowed  largely,  collected  large  amounts  of  cap- 
ital by  the  creation  of  her  national  debt,  and,  on  the  other 
hand,  retained  her  circulating  medium  in  so  perfect  a  condi- 
tion that  the  moment  the  war  was  over  she  slipped  along 
smoothly  upon  the  wheels  of  industrial  success  and  prosperity, 
without  any  derangement  of  her  business.  And,  during  that 
time,  she  carried  through  one  of  the  most  magnificent  schemes 
of  exchange,  in  the  form  of  the  payment  of  indemnity,  that 
has  ever  taken  place  in  history.  She  actually  paid  that  foreign 
indemnity  of  the  war  to  Germany  practically  without  derang- 
ing the  rate  of  exchange  in  France." 

He  don't  tell  how.  Don't  tell  that  she  flooded  all  the 
avenues  of  trade  with  her  paper  money,  and  thus  made  her 


American  Financial  Histoi'y.  197 

goods  so  plenty  and  cheap  that  Germany  bought  them  instead 
of  her  own,  and  was  then  in  turn  nearly  bankrupted;  so  that 
France  paid  three-quarters  of  the  "milliard"  in  French  goods  ! 

But  hear  the  true  story  from  Wendell  Phillips,  an  all- 
round,  up-to-date  reformer,  whose  motto  was,  "Act  in  the  liv- 
ing present."  When  the  monopolizers  of  black  men  were 
beaten  he  turned  to  face  the  monopolizers  of  all  men  and 
women.  Here  is  his  eloquent  picture: 

"France  has  just  paid  Germany  one  billion  dollars.  Her 
chief  cities  have  been  sacked  and  plundered.  Humiliated  by 
defeat,  torn  by  civil  dissensions,  she  laughs,  while  all  the  rest 
of  Christendom  wade  through  the  mire  of  bankruptcy.  Her 
ships  are  full  busy,  and  what  little  other  nations  do  is  in  car- 
rying to  and  fro  her  manufactures.  Her  homes  are  happy, 
her  streets  crowded  with  passing  trains  laden  with  goods;  all 
her  mills  hurrying  night  and  day  to  get  even  with  her  demand 
upon  them.  Labor  walks  rejoicing  and  capital  sleeps  easy, 
fat  with  its  gains.  What  magician  has  done  this?  Paper 
money.  Like  the  rest  of  the  nations,  she  ran  to  its  protection 
during  the  stress  and  strain  of  her  German  war.  Unlike  and 
wiser  than  the  rest  of  us,  she  has  not  hurried  back  to  coin. 
Wiser  than  we,  she  received  the  paper  she  offered  to  others. 
This  honesty  has  its  reward.  Her  paper  is,  to-day,  more 
valuable  than  gold." 

Among  the  great  results  of  this  policy  were  an  abundance 
of  gold  and  silver  coming  from  abroad,  until  $1,200,000,000  was 
found  to  be  in  the  country. 

Lest  some  may  doubt  the  statement  about  the  Germans 
only  getting  a  little  gold  for  that  indemnity,  an  extract  is  here 
given  from  "Our  Money  Wars,"  p.  152: 

"Ivan  C.  Michels  says:  'The  indemnity  from  France  to 
Germany,  after  the  war  of  1870-71,  including  interest  at  n've 
per  cent,  per  annum,  amounted  to  81,060,209,015.  After  credit- 
ing France  with  the  value  of  certain  railroads  in  Alsace  and 
Lorraine,  the  amount  of  indemnity  due  Germany  was  8998,- 
172,069  or  4,990,860,319  francs,  which  was  paid  by  the  French 
government  through  the  Bank  of  France.  At  my  request  the 
Bank  of  France  furnished  to  me  several  years  ago  the  following 
statement  as  to  the  mode  of  having  paid  said  indemnity: 

Francs. 

In  bank  notes  of  the  Bank  of  France 125,000,000 

In  French  gold  coins 273,003.050 

In  French  silver  coins 239.291,875 

In  German  bank  notes 105,039,045 


198  American  Financial  History. 

Bills  of  exchange  drawn  in  thalers 2,485,513,729 

Bills  drawn  on  Frankfurt  in  florins 235,128  152 

Bills  drawn  on  Ham  burg  in  marksbancs 265,216,990 

Bills  drawn  on  Berlin  in  reichsmarks 79.072,309 

Bills  drawn  on  Amsterdam  in  florins 2~>0,540,821 

Bills  drawn  on  Antwerp  and  Brussels  in  francs 295.701.516 

Bills  drawn  on  London  in  pounds  sterling 637,349,832 


Total  francs 4,990.860.349 

"  'The  patriotic  people  of  France  raised  the  vast  sum  by  a 
loan  in  less  than  six  months  from  the  time  the  government 
appealed  to  them.  Germany  expected  to  receive  for  years  to 
come  five  per  cent,  per  annum  on  the  indemnity  bonds;  but 
the  Bank  of  France,  through  the  French  bankers,  drew  on 
Germany,  England,  Scotland  and  Belgium,  and  in  four  months' 
time  the  whole  indemnity  was  paid.  Never  in  the  history  of  the 
world  has  this  financial  transaction  been  equaled,  and  I  doubt 
that  any  other  banking  institution  could  have  succeeded  so 
well  as  the  Bank  of  France.  Germany  expected  the  payment 
in  gold  coin  or  bullion,  having  previously  and  purposely  de- 
monetized silver.  But  the  fact  remains  that  actually  in  gold 
only  273,003,050  francs,  equal  to  $54,600,610,  was  paid  by  the 
Bank  of  France,  and  that  sum  only  left  France,  was  remelted 
in  Germany,  and  coined  into  reichsmarks.  England,  with  her 
gold  standard,  had  to  part  with  her  gold  to  the  amount  of  637,- 
348,832  francs,  equal  to  $127,469,964.  Bills  of  exchange  on  the 
German  bankers  throughout  the  German  empire,  especially  on 
Hamburg,  Berlin  and  Frankfurt,  came  to  3,064,901180  francs, 
equal  to  $612,986,236,  nigh  on  two-thirds  of  the  whole  amount 
of  the  indemnity.  This  magnificent  stroke  of  finance  on  the 
part  of  the  Bank  of  France  and  the  French  bankers  came  near 
ruining  the  leading  German  bankers;  and  forty-one  banking 
houses  throughout  the  German  empire  had  to  suspend  tempo- 
rarily, not  being  able  to  honor  the  drafts  made  upon  them.  The 
extravagance  of  the  German  people  during  the  war  of  1870-71 
brought  them  into  debt  to  France  for  luxuries,  wines,  etc.,  to 
an  enormous  extent;  and  when  the  Bank  of  France  purchased 
bills  of  exchange  from  the  French  bankers,  who  drew  on  their 
German  correspondents,  a  panic  ensued,  and  the  Germans 
suffered  more  than  is  generally  supposed.'  " 

The  above  from  Michels  shows  that  he  saw  but  dimly  what 
Phillips  saw  so  plainly,  that  government  paper  money,  nour- 
ishing all  industries,  gave  France  that  victory.  Michels  catches 
a  glimpse  of  the  truth  when  he  speaks  of  luxuries,  wines,  etc. 
To  get  a  clear  view  of  the  French  financial  genius  we  have 
to  go  back  to  1818,  when  Louis  Philippe  abdicated  and  the  re- 


American  Financial  History.  199 

public  was  founded  amid  great  confusion.  The  French  have 
an  instinct  for  finance  far  superior  to  anything  yet  shown— by 
our  rulers  at  least-^in  England  and  America.  "Paris,"  says 
Victor  Hugo,  "is  the  city  of  the  initiative."  It  is  not  afraid  to 
start  things.  It  is  not,  like  Washington  and  New  York,  al- 
ways asking  what  London  would  do  or  think.  Taking  Louis 
Blanc's  advice  in  1848,  it  started  national  work-shops  to  insure 
the  employment  of  surplus  labor.  Those  did  good  for  a  time, 
but  they  were  soon  perverted  and  destroyed  by  a  treacherous 
Jew  who  got  hold  of  them. 

Another  new  departure  was  more  successful.  "Besides  its 
regular  financial  operations,"  says  the  London  Times  of  Febru- 
ary 16, 1849,  "the  Bank  of  France  made  vast  advances  to  the 
city  of  Paris,  to  Marseilles,  to  the  Department  of  the  Seine,  and 
to  the  hospitals,  amounting  in  all  to  260,000,000  francs.  But 
even  this  was  not  all.  To  enable  the  manufacturing  interests 
to  weather  the  storm,  at  a  moment  when  all  sales  were  inter- 
rupted, a  decree  of  the  National  Assembly  had  directed  ware- 
houses to  be  opened  for  the  reception  of  all  kinds  of  goods, 
and  provided  that  the  registered  invoices  of  these  goods  so 
deposited  should  be  made  negotiable  by  indorsement.  The 
Bank  of  France  discounted  these  receipts.  In  Havre  alone 
18.000,000  francs  was  thus  advanced  upon  colonial  products, 
and  in  Paris  14,000,000  on  merchandise.  In  all  60,000,000  francs 
was  thus  made  available  for  all  the  purposes  of  trade.  Thus 
the  great  institution  had  placed  itself,  as  it  were,  in  direct  con- 
tact with  every  interest  of  the  community,  from  the  Minister 
of  the  Treasury  down  to  the  trader  in  a  distant  part.  Like  a 
huge  hydraulic  machine,  it  employed  its  colossal  powers  to 
pump  a  fresh  stream  into  the  exhausted  arteries  of  trade,  to 
sustain  credit  and  preserve  the  circulation  from  complete 
collapse." 

How  like  "a  grimacing  dance  of  apes"  our  American  way 
of  handling  financial  crises  looks,  in  comparison  with  the  above. 
The  Bank  of  England. 

Prof.  Laughlin  showed  the  usual  gold-bug  besotted  wor- 
ship of  British  finance  in  this: 

"In  the  Bank  of  England  the  first  moment  of  stringency 


200  American  Financial  History. 

the  rate  of  discount  is  raised.  That  has  the  effect  or  prevent- 
ing all  unnecessary  loans.  The  borrower  who  has  good  collat- 
eral will  get  the  money  if  he  is  willing  to  pay  an  increased  rate. 
Our  system  is  such  that  we  can  loan  until  we  come  to  the  legal 
limit;  and  is  deficient  in  that  respect,  as  we  cannot  loan  at  a 
greater  discount  because  of  the  iniquitous  action  of  the  usury 
laws.  You  can  help  a  customer  by  increasing  the  rate.  Just  at 
the  moment  of  the  greatest  stringency  our  American  system  is 
deficient." 

Ordinary  decorous  language  would  fail  to  characterize  that 
infamous  statement.  The  fact  is  that  the  British  system  is 
utterly  brutal.  Our  "iniquitous  usury  laws"  prevent  a  man 
from  giving  everything  he  has  to  the  banks  in  hard  times.  The 
British  system  is  that  of  Jay  Gould  in  his  gold  corner  of  1869. 
He  settled  with  his  debtors  by  "taking  all  they  had."  He  was 
merciful,  and  forgave  them  the  balance;  which  is  the  usual 
stock  exchange  style. 

In  coin-paying  eras  corrupt  governments  and  Shylocks 
have  debased  coins  to  make  them  go  further.  In  these  credit- 
mongerkig  times  they  try  to  bring  their  coin  basis  down  to  one 
metal,  gold,  and  clamor  for  extreme  fineness  of  that,  in  order  to 
make  their  inverted  pyramid  of  credit  go  further  and  sell 
dearer.  The  policy  of  Great  Britain,  for  instance,  has  been  to 
make  gold,  its  standard,  so  dear  and  inaccessible  to  the  for- 
eigners and  the  debtor  class  that  they  would  find  the  other 
commodities  in  the  market  cheaper  than  the  gold  in  the  market, 
so  that  settlements  in  other  commodities  would  be  prefer- 
able. The  retention  of  gold  in  the  Bank  of  England,  by  rais- 
ing discounts  in  panicky  times,  though  murderous  ("kindness," 
says  Mr.  Laughlin)  to  individual  active  business  men,  is  a 
necessary  factor  in  this  piratical  scheme,  and  the  fulcrum 
upon  which  England  derricks  into  her  treasure  vaults  the 
plunder  of  the  whole  world.  Business  is  made  a  lottery,  turn- 
ing out  dazzling  prizes  that  keep  merchants  from  rebellion. 
Long-headed  American  Shylocks  hope  to  see  the  United  States 
as  much  more  successful  in  plundering  the  globe,  in  this  way, 
as  our  country  is  larger  than  England. 

Finally,  as  to  Laughlin,  with  what  bitter  scorn  this  state, 
ment  f rom  the  "closet  scholar"  will  be  greeted  by  the  thou- 


American  Financial  History.  201 

sands  of  manufacturers  who,  during  panics,  have  had  to  shut 
their  factories  for  lack  of  cash  "to  pay  the  hands" — though 
they  had  all  but  gilt-edged  collateral: 

"The  monetary  function  has  to  do  solely  with  exchanges  of 
goods;  it  hasn't  anything  to  do  with  their  production." 

The  Washington  "Currency  Reformers." 

In  finishing  this  bird's-eye  view  of  the  financial  history  of 
this  country,  a  brief  review  of  the  current  financial  plans  can 
not  well  be  avoided.  It  may  be  said  of  them,  in  a  general 
way,  that  no  other  set  of  robbers  ever  before  attempted  to 
secure  a  law  guaranteeing  them  unrestricted  right  to  plunder 
with  unlimited  government  protection.  The  out  and  out 
black-flag  pirates,  as  represented  by  Walker,  of  Massachusetts, 
have  a  plan  as  simple  and  explicit  as  a  patent  medicine.  It 
runs  thus:  "Retire  the  greenbacks,  kill  .silver  once  for 
all,  and  let  the  bankers  manage  the  currency."  This  obsolete 
idea,  that  banks  should  issue  money,  is  showing  all  the  vim  of 
a  death  struggle.  But  a  thousand  columns  of  speeches  in  the 
Congressional  Globe  on  the  safety  of  the  national  bank  system 
are  answered  by  this  solitary  fact:  In  the  year  1893,  360 
banks  west  of  the  Alleghanies,  owing  $125,000,000,  went  to 
smash,  and  about  a  dozen  bankers  are  now  in  prison  or  exile, 
while  many  more  escaped  as  by  tire. 

THE  BALTIMORE  PLAN,  which  a  while  ago  had  the  sanction 
of  the  Comptroller,  Secretary  of  the  Treasury  and  the  Presi- 
dent, is,  in  a  word,  a  scheme  for  issuing  circulating  notes  by 
both  national  and  State  banks,  otherwise  than  upon  the 
pledge  of  government  bonds  as  now.  The  banks  are  to  issue 
notes  upon  their  own  assets,  supplemented  by  a  deposit  of  a 
certain  amount  of  greenbacks,  as  a  safety  and  redemption 
fund.  The  theory  of  this  plan  is  that  when  any  special 
demand  for  currency  arises  the  banks  will  make  a  special 
issue  of  notes  to  supply  it;  and  that  as  soon  as  this  demand 
ceases  the  banks  will  retire  the  notes  it  has  called  out.  Thus 
the  quantity  of  currency  available  will,  it  is  assumed,  never 
be  either  deficient  or  excessive;  and  there  will  never  be  at  any 
point  either  a  monetary  stringency  or  a  monetary  plethora. 


202  American  Financial  History. 

Were  the  function  of  currency  exclusively  that  of  facilitating 
exchanges,  such  a  system  (like  that  for  3-65  interconvertible 
bonds)  might  be  useful.  But  currency  serves  the  additional 
purpose  of  measuring  the  price  of  commodities;  and  since  its 
relalion  to  those  commodities  is  deter  mined  by  its  volume,  any 
change  of  its  volume  changes  its  value  also,  and  consequently 
impairs  its  stability  as  a  measure  of  prices. 

Again,  as  to  the  State  bank  feature  of  the  Baltimore  plan, 
the  idea  prevails  extensively  in  the  agricultural  districts  of 
the  West  and  South  that  the  chief  business  of  a  bank  is  to 
lend  money  to  borrowers.  That  is  why  they  clamor  for  the 
removal  of  the  ten  per  cent,  tax  on  State  banks.  An  abund- 
ance of  greenbacks  and  silver  would  do  away  with  most  of  the 
need  of  borrowing  from  banks.  That's  what's  the  matter  with 
the  banks. 

No  further  mention  is  needed  here  of  the  schemes  of 
Carlisle,  Springer,  Vest  and  others.  They  seem  all  dead  at 
this  writing,  and  they  certainly  should  be  damned.  Even  the 
New  York  Tribune,  a  monopolists'  own,  says  of  one  of  the 
safety-fund  schemes: 

"The  bankers  are  to  have  free  issue;  and  when  one  fails 
the  government  is  to  collect  from  the  other  banks  and  redeem 
its  currency.  But  in  time  of  panic  the  government  would  not 
and  could  not  do  that." 

On  the  other  hand,  the  New  York  Sun,  edited  by  a 
man  who  was  a  radical  socialist  in  his  youth,  and  now  a  bitter, 
hardened,  cruel  cynic,  although  lately  a  greenback  paper,  is 
as  rabid  as  the  New  York  Evening  Post  in  advocacy  of  gold 
and  gold  only.  It  says  of  the  latest  safety-fund  humbug: 

"The  new  bill,  like  the  old  one,  authorizes  an  inflation  of 
our  paper  currency,  by  at  least  §550,000,000,  without  providing 
for  its  redemption  in  gold,  and  without  any  effectual  provision 
for  diminishing  the  volume  of  outstanding  legal  tender.  Our 
New  York  financial  magnates,  who  have  put  up,  this  year, 
8116,000,000  in  gold,  to  save  the  treasury  from  suspending 
gold  payments,  ought  to  bestir  themselves  in  opposition  to 
this  latest  administration  folly,  if  they  would  not  see  all  their 
efforts  go  for  naught  and  the  catastrophe  which  they  have 
labored  to  avert  rendered  inevitable."  [! !] 

In  Chicago  we  have  Lyman  Gage's  plan.    Mr.  Gage  is  a 


American  Financial  History.  203 

man  of  intellect  who  resembles  some  of  those  orthodox  clergy- 
men who,  by  a  long  course  of  theological  dissipation,  i.  e., 
reasoning  from  false  premises,  have  impaired  their  naturally 
fine  faculties.  Mr.  Gage,  if  we  must  credit  him  with  sincer- 
ity, has  come  to  the  same  condition  by  financial  dissipation. 
But  his  plan  is  not  as  vicious  as  some.  To  furnish  the  needed 
foundation  for  national  bank  circulation,  he  would  have  the 
treasury  issue  $250,000,000  of  2^  per  cent,  bonds,  for  which 
greenbacks  or  Sherman  notes  should  be  paid.  The  money 
paid  would  not  become  an  asset  of  the  government.  It  would 
be  canceled,  destroyed,  burned  up.  Uf  his  scheme  the  Chi- 
cago Times  well  says: 

"Like  other  bankers,  he  thinks  the  chief  end  to  be  sought 
is  to  relieve  the  government  of  the  duty  of  issuing  the  circulat- 
ing medium  of  the  country.  Upon  this  point  we  must  note 
an  emphatic  disagreement  with  Mr.  Gage,  and  with  the  whole 
school  of  financiers  of  which  he  is  a  type." 

A  specimen  of  the  demoralization  and  danger  of  the  titnea 
is  seen  in  a  recent  statement  of  Senator  Gorman,  that  he  and 
Quay  had  settled  in  their  minds  that  a  certain  government 
bond  scheme,  like  that  of  Gage,  in  eight  items,  including  some 
about  silver,  was  about  the  only  proposition  that  could  pass 
the  present  Congress.  No.  3  among  the  eight  items  coolly  dis- 
misses the  Greenback  thus:  "The  legal  tenders  to  be  retired 
and  canceled  as  the  bonds  are  put  out." 

On  the  other  hand,  the  Chicago  Inter  Ocean,  which  is  re- 
penting of  some  of  its  financial  sins,  and  remembering  what  a 
good  greenback  paper  it  was  in  1878,  says:  - 

"One  of  the  perils  of  the  present  financial  situation  ia 
the  disposition  shown  to  reopen  the  greenback  question.  It 
took  fifteen  years  to  fight  the  great  battle.  Secretary  McCul- 
loch  attempted  to  take  snap  judgment  against  legal-tender 
notes,  paying  them  off  at  a  rapid  rate.  Illinois,  through  one  of 
its  Congressmen,  E.  C.  Ingersoll,  stepped  in  the  very  first  day 
Congress  convened  after  that  paying-off  process  had  begun 
with  a  resolution  which  stopped  it.  Then  began  the  intriguing 
of  the  Eastern  bankers  to  destroy  the  greenbacks,  and  when 
the  last  decisive  conflict  occurred  Illinois  was  again  in  the 
leadership,  G.  L.  Fort  being  the  especial  champion  of  the 
greenback  cause  as  asainst  both  the  contraction ists  and  the 
expansionists.  There  was  a  great  victory.  For  half  a  gener- 


204  American  Financial  History. 

ation  the  anti-greenbackers  have  been  quiescent .  They  have 
come  to  the  front  again  with  this  session  of  Congress.  The 
knock-out  received  in  caucus  Monday  ought  to  satisfy  them 
that  the  greenback  is  here  to  stay.  There  never  could  be  a 
better  money.  It  is  good  for  its  face  the  world  over.  In  that 
uttermost  end  of  the  earth,  China  or  Japan,  the  United  States 
legal  tender  note  is  good  for  its  face  value,  and  whatever 
changes  are  made,  that  part  of  our  currency  should  remain  in- 
tact. Should  the  current  of  Congressional  events  occasion  a 
show  of  hands  in  the  Republican  party  on  this  question  no 
doubt  an  overwhelming  majority  would  say,  as  did  the  Demo- 
cratic caucus,  let  the  greenbacks  alone." 

An  extraordinary  scene  in  the  House  between  Representa- 
tives Hepburn  and  Hendrix  so  fairly  illustrates  the  muddled 
stupidity  and  impudence  of  the  gold-bugs  that  it  deserves 
notice  here  as  a  sign  of  the  situation.  Mr.  Hepburn  described 
Mr.  Hendrix  as  a  self  heralded  national  banker  who  came  here 
with  oracular  utterances  to  tell  the  house  what  to  do.  Mr. 
Hepburn  said  his  self-laudation  was  impaired  by  the  recollect 
tion  of  his  speech  sixteen  months  ago,  when  the  same  con- 
ditions existed.  Mr.  Hendrix  then  found  the  panacea  for  all 
financial  ills  in  the  repeal  of  the  Sherman  silver  law. 

Before  describing  this  discussion,  attention  should  be 
called  to  the  fact  that  the  panic  of  1893  was  immediately 
brought  on  by  the  bankers  because  Secretary  Carlisle  under- 
t'ook  to  perform  about  the  only  good  deed  he  has  ventured 
upon  as  Secretary,  i.  e.,  to  pay  the  Sherman  treasury  notes 
according  to  the  letter  of  the  act  of  July  14, 1890,  in  silver, 
just  as  France  would  have  done.  Now  mark  how  Hendrix 
"opened  his  mouth  and  put  his  foot  in  it"  and  how  finely  Hep- 
burn tripped  him. 

Mr.  Hendrix  described  at  some  length  the  process  by 
which  the  gold  was  withdrawn  by  speculators  for  shipment 
abroad,  and  then  proceeded  to  contrast  this  with  the  situation 
in  France,  where  the  Bank  of  Prance  refused  to  pay,  except 
where  actually  necessary,  more  than  five  per  cent,  of  gold  on 
its  demand  obligations.  These  aggressions  on  our  gold  reserve 
must  be  stopped,  and  if  the  pending  bill  would  stop  them, 
afford  relief,  take  the  government  out  of  the  banking  business, 


American  Financial  History.  205 

as  it  has  been  taken  out  of  the  silver  business,  he  would  vote 
for  it. 

"Does  the  action  of  the  Bank  of  France,  in  refusing  to  pay 
more  than  five  per  cent,  in  gold,"  asked  Mr.  Hepburn,  "impair 
the  credit  of  that  bank  ?" 

"No." 

"Then  would  the  credit  of  the  United  States  be  impaired 
if  the  United  States  should  exercise  its  discretion,  and  redeem 
the  Sherman  notes  in  silver  ?" 

"Yes,  I  believe  it  would,  at  this  time,"  replied  Mr.  Hendrix. 

"Why  ?" 

"Because  of  the  general  distrust  of  the  government's 
ability  to  pay  in  gold.  One  hundred  and  fifty-nine  million  dol- 
lars of  Sherman  gold  promises  [?]  to  pay  cannot  be  met  with- 
out gold." 

"But  the  notes  are  redeemable  in  coin,  not  in  gold,"  was 
Mr.  Hepburn's  parting  shot. 

Mr.  Hepburn  declared  that  Mr.  Hendrix  had  pointed  out 
unwittingly  the  remedy  for  the  present  evil  when  he  told  the 
House  that  the  great  banking  houses  of  Europe  exercised  their 
discretion  about  depleting  their  gold  vaults.  "Why  will  not 
the  Secretary  of  the  Treasury  exercise  the  same  discretion  ?" 
he  asked,  amid  a  round  of  applause.  "  The  exercise  of  this 
discretion  did  not  impair  the  credit  of  European  banks.  Who 
dared  to  say  that  the  credit  of  this  country,  with  65,000,000 
people  behind  it,  and  an  unlimited  taxing  power,  would  be  im- 
paired because  it  refused  to  kneel  at  the  demands  of  the 
Shylocks?" 

"Why  have  not  the  Republican  Secretaries  of  the  Treasury 
exercised  that  discretion?''  asked  Mr.  Pence,  of  Colorado. 

"I  have  not  been  Secretary  of  the  Treasury,"  replied  Mr. 
Hepburn  hotly.  "When  I  am  I  will  answer.  I  am  as  fully 
convinced,  however,  as  I  am  that  I  am  alive,  that  if  the  Secre- 
tary of  the  Treasury  were  now  to  exercise  his  discretion  and 
pay  gold  when  legitimate  redemptions  were  asked,  and  refuse 
it  to  sharks  and  speculators,  the  evils  from  which  we  suffer 
would  cease  to  be." 

A  broader  view  is  that  the  prime  motive  of  the  Secretary 


206  American  Financial  History. 

in  exercising  his  discretion  should  be  the  welfare  of  the  gov- 
ernment; and  gold  should  be  refused  where  its  payment  is 
likely  to  hurt  the  treasury. 


In  the  foregoing  pages  we  have  attempted  to  give  such  a 
bird's-eye  view  of  American  money  and  finance  as  would  serve 
as  an  example  and  warning  for  the  future.  We  behold  in  this 
short  story  how  our  finances  were  continually  run  upon  the 
rocks  and  shoals  of  a  false  "political  economy,"  so-called,  and 
how  they  were  occasionally  pulled  off  —  though  remaining  most 
of  the  time  stuck  fast  in  the  most  dismal  way. 

We  Populists  claim  to  have  a  new  and  true  American  sys- 
tem of  finance,  vastly  better  than  anything  possessed  in  Europe, 
not  omitting  prosperous  and  wise  France.  We  sternly  demand 
that  the  financial  quacks  and  quacksalvers,  now  making  day 
and  night  hideous  at  Washington,  step  down  and  out,  and  let 
the  People's  Party  pull  the  country  out  of  the  Serbonian  bog 
into  which  they  have  plunged  it. 


No  BA.DIANT  pearl  which  crested  fortune  wears, 
No  gems  that  twinkling  hang  from  beauty's  ears, 
Nor  the  bright  stars  which  night's  blue  arch  adorn, 
Nor  rising  sun  that  gilds  the  eternal  morn, 
Shine  with  such  lustre  as  the  tear  that  breaks, 
For  others'  woe,  down  Virtue's  manly  cheek." 


'  THE  man  of  law 

Cunningly  could  he  quibble  out  a  flaw, 
And  scratch  men's  scabs  to  ulcera." 


"GEE AT  parties  represent  in  their  beginnings  great  prin- 
ciples; in  their  old  age,  great  prejudices." — Ignatius  Donnelly. 


"  THEBE  is  in  human  affairs  one  order  which  is  the  best. 
That  order  is  not  always  the  one  which  exists;  but  it  is  the 
order  which  should  exist  for  the  greatest  good  of  humanity. 
God  knows  it,  and  wills  it;  man's  duty  is  to  discover  and 
establish  it." — Emilt  da  Lavekye. 


ft  "Hugh  McCulloch  hamstrung  the  whole  nation.  His  man- 
agement of  the  finances,  while  it  enriched  him  and  made  him 
a  great  London  banker,  has  cost  the  American  people  more 
than  the  war  did:'— WILLIAM  D.  KELLEY. 


THE  EIGHT  MONEY  CONSPIRACIES. 

1.  The  Exception  Clause.  Feb.  25, 1862.  In  1861  and  1862 
demand  treasury  notes  to  the  amount  of  $60,000,000  were  issued 
by  the  government  and  made  legal-tender  money  for  all  debts, 
public  and   private— equal    to  coin.     Wall  Street  could  not 
gamble  in  legal-tender  paper  money;  so,  as  soon  as  the  legal 
tender  act  passed  the  House  and  was  sent   to  the  Senate,  the 
Shylocks  placed  on  the  greenback  what  is  known  as  the  "excep- 
tion clause" — "Except  duties  on  imports  and  interest  on  the 
public  debt."    This  practically  demonetized  the  U.  S.  treasury 
note,  and  cost  the  producing  classes  millions  of  dollars.    The 
greenback  "went  down,"  or,  more   correctly  speaking,  gold 
"went  up,"  until  II  in  paper  money  was  valued  at  only  37  cents 
when  compared  with  gold.    John  Sherman  said:    ''We  pur- 
posely depreciated  the  greenback,  to  get  sale  for  our  bonds." 
He  was  willing  to  destroy  the  people's  money  to  appease  the 
greed  of  gold  gamblers  at  home  and  abroad. 

2.  The  National  Bank  Act.  Feb.  25, 1863.  This  scheme 
was  introduced  in  the  Senate  and  advocated  by  John  Sher- 
man in  the  interest  of  bondholders  and  capitalists,  just  one 
year  after  legal-tender  notes  were  authorized  by  law,  and  before 
sufficient  time  had  been  given  to  test  their  utility.  The  express 
object  was  to  have  the  bank  notes  supersede  the  legal  tender 
notes,  after  the  investment  of  legal  tenders  in  bonds. 

"I  look  upon  the  national  bank,  as  now  recognized  by  law," 
says  Myers  in  his  "Money,  its  History  and  Functions,"  "as  one 
of  the  most  gigantic  schemes  for  robbing  the  people  ever  de 
vised  by  man.  I  cannot  conceive  of  a  single  reason  for  perpet- 
uating the  system  one  day  beyond  the  time  required  to  settle 
its  affairs.  The  national  banks  of  this  country  have  cost  the 
people,  in  thirty  years  of  their  existence,  over  $6,000,000,000. 

207 


208  The  Eight  Money  Conspiracies. 

The  credit  which  the  banker  sells  at  from  7  to  15  per  cent, 
costs  him  only  1  per  cent,  on  actual  circulation;  hence  it  is  vir- 
tually a  present  to  him.  He  draws  interest  on  this  credit;  on 
what  he  himself  owes.  His  note  is  not  money,  nor  is  it  in  any 
sense  a  legal  tender  between  man  and  man.  It  is  simply  a 
'promise  to  pay.'  The  banker  lends  his  credit,  with  which  he 
has  supplied  himseif  by  gift  from  the  government,  and  the  bor- 
rower pledges  his  wealth;  the  banker  being  far  more  secure 
than  the  holder  of  the  banker's  paper.  The  banker  takes  pay 
for  something  he  does  not  furnish;  for  the  capital  (wealth)  is 
furnished  by  the  borrower.  So  the  banker  gets  something  for 
nothing,  and  the  borrower  pays  for  that  which  he  never 
-Deceives." 

Banks  are  run  on  the  deposits,  rather  than  on  any  capital 
the  banker  himself  may  have.  The  patrons  of  the  bank  furnish 
the  capital,  and  also  the  security.  The  banker  lends  other  peo- 
ple's money  to  other  people;  on  this  he  draws  interest;  he 
conducts  his  business  on  your  money  and  his  credit,  which  you 
furnish  him. 

Now,  if  the  government  can  afford  to  let  the  banker  have 
credit  at  1  per  cent,  on  actual  circulation,  why  can't  the  treas- 
ury supply  all  the  people  with  legal-tender  money  at  the  same 
rate?  Why  not  issue  the  money  direct  to  the  people  and  then 
pay  interest  into  the  U.  S.  treasury,  instead  of  into  the  coffers 
of  corporate  institutions?  National  banks  are  expensive  lux- 
uries which  we  don't  need.  So  let  the  people  unite  in  demand- 
ing their  abolition  at  once,  and  then  institute  in  their  stead 
United  States  banks,  sub-treasuries  if  you  please,  backed  by 
all  the  people,  and  hence  absolutely  safe.  This  would  make  a 
government  for  the  people  instead  of  for  the  corporations.  Let 
us  do  business  on  the  credit  of  the  people— on  the  credit  of  the 
government;  not,  as  we  are  now  doing,  on  the  credit  of  banks 
and  bankers. 

3.  The  Funding  Act.  April  12, 1866.  Commonly  called 
contraction.  This  law  authorizes  the  Secretary  of  the  Treasury 
to  retire  the  legal-tender  notes  by  investing  them  in  6  per 
cent,  bonds.  Contraction  continued  until  some  $1,500,000,000 
were  destroyed,  and  a  corresponding  amount  of  6  per  cent. 


The  Eight  Money  Conspiracies.  209 

bonds  issued.  The  treasury  notes,  or  legal  tenders,  were 
nearly  all  non-interest-bearing.  This  reduction  of  the  cur- 
rency was  an  outrage  upon  the  people.  The  volume  should 
have  been  increased,  not  diminished,  to  have  kept  pace  with 
an  increasing  population. 

4.  The  Credit  Strengthening  Act.    March  18,1869. 
This  law  provides  that  the  legal-tender  treasury  notes  should 
be  paid  in  coin,  as  also  all  interest-bearing  obligations  of  the 
government.    Prior  to  the  passage  of  this  law,  public  obliga- 
tions had  been  payable  in  the  lawful  money  of  the   country; 
the  greenback  was  lawful  money,  redeemable  the  same  as  gold 
and  silver  coin,  except  duties  on  imports  and  interest  on   the 
public  debt.    The  credit  of  the  nation  was  good,  and  needed  no 
strengthening.  The  war  was  over  and  the  country  was  prosperous 
and  the  people  contented.     Why,  then,  add  another  burden? 

5.  An  Act  Refunding  the  Public  Debt.    July  H, 
1870.    This  act  authorized  the  issue  and  sale  of  81,500,000,000 
U.  8.  bonds,  to  refund  5-20  bonds,  and  make  them  conform  to 
the  law  of  1860.    To  fund  means  to  put  public  obligations  into 
stocks  and  securities,  making  them  interest-bearing. 

The  public  debt  should  have  been  paid,  as  at  first  provided, 
in  the  lawful  currency  of  the  country,  gold,  silver,  and  treas- 
ury notes.  The  law  of  1869  added  $500,000,000  to  the  5-20 
bonds,  by  making  them  payable  in  coin;  then  to  re-fund  the 
bonds,  just  to  please  an  English  aristocracy,  is  villainy  unnamed 
and  unnainable. 

6.  The  Demonetization  of  Silver.      Feb.  12, 1873. 
The  act  of  1869  had  made  all  public  obligations  payable  in  coin, 
gold  or  silver;  while  the  act  of  1873,  clandestinely  passed,  de- 
monetized   silver,  making  the  public  debt,  interest  and  all, 
payable  in  gold  coin — a  further  contraction  of  the  volume  of 
currency. 

The  silver  dollar  was  created  by  the  Congress  of  the 
United  States  on  April  2, 1792,  and  made  the  unit  of  value.  It 
contains  412)^  grains  of  standard  silver,  nine  parts  pure  silver, 
one  part  alloy.  At  that  time  the  mints  of  all  the  principal 
nations  of  the  world  were  open  to  the  free  coinage  of  both  gold 


210  The  Eight  Money  Conspiracies. 

and  silver.  That  is,  all  of  such  metal  presented  to  the  mints 
could  be  converted  into  money  without  any  charge  except  the 
actual  cost  of  coining.  The  ratio  then  was  about  15J^  to  1, 
that  is,  one  ounce  of  gold  was  equal  to  15^  ounces  of  silver. 
January  18, 1837,  the  ratio  between  gold  and  silver  coins  of  the 
United  States  was  changed  to  15.988  to  1,  commonly  referred 
to  as  16  to  1. 

Free  coinage  of  silver  prevailed  in  the  United  States  from 
1792  until  1873,  when,  by  an  act  of  Congress,  silver  was  demon- 
etized, making  all  paper  currsncy  and  government  obligations 
redeemable  in  gold.  The  act  demonetizing  silver  was  under- 
stood by  few,  and,  in  fact,  many  of  those  who  voted  for  it,  and 
President  Grant,  who  signed  the  bill,  were  unaware  of  its  actual 
meaning  and  effect.  As  will  be  proven  by  documents  and  facts 
submitted  elsewhere  in  this  volume,  the  money  speculators  of 
England,  backed  by  cupidity  and  ignorance  on  this  side,  were 
the  real  instigators  of  the  act  of  1873.  There  was  every  reason 
in  the  world  why  England  should  desire  the  demonetization  of 
silver  here.  England  is  a  creditor  nation,  and  her  capitalists 
hold  vast  amounts  in  government  and  other  securities  abroad 
Prom  this  country  alone  the  capitalists  of  Great  Britain  derive 
each  year  more  than  five  hundred  millions  of  dollars  for  inter- 
est on  their  investments,  all  of  which  is  paid  in  gold  or  its 
equivalent.  The  United  States  produces  an  enormous  quan- 
tity of  silver,  but  we  very  humbly  submit  to  the  gold  standard 
as  set  up  by  Great  Britain.  We  deny  ourselves  the  right  to 
use  a  metal  of  which  we  have  an  abundance  and  adopt  one 
more  scarce  and,  consequently,  more  expensive.  By  this  policy 
we  are  forced  to  purchas  gold  abroad,  thus  adding  constantly 
to  the  burden  of  a  perpetual,  interest-bearing  national  debt. 

By  accomplishing  the  demonetization  of  silver  in  this  coun- 
try, England  gained  a  double  victory,  for  the  governments  of  the 
Latin  Union,  France,  Belgium,  Italy,  Switzerland  and  Greece, 
were  soon  afterwards  forced  to  suspend  silver  coinage.  The 
gain  to  England  and  the  loss  to  the  other  countries  involved, 
especially  to  the  United  States,  by  this  general  demonetization 
of  silver,  can  hardly  be  estimated.  The  loss,  of  course,  was  the 
heaviest  in  this  country,  where  the  production  of  silver  is  very 


The  Eight  Money  Conspiracies,  211 

large,  where  BO  many  are  engaged  in  agricultural  pursuits,  and 
where  a  large  and  freely  circulating  volume  of  money  is  BO  es- 
sential to.  commercial  activity. 

When  silver  was  demonetized,  we  were  under  the  burden 
of  an  enormous  national  debt,  but  every  dollar  of  this  was  pay- 
able in  silver.  The  stimulated  demand  for  gold,  and,  conse- 
quently, its  increase  in  value,  was  not  the  only  gain  to  England. 
She  now  buys  our  cheap  silver  bullion,  exchanges  it  at  its  coin- 
age value  for  products  in  the  silver-using  countries  of  Asia,  Af- 
rica and  South  America,  and  nets  a  profit  of  over  one  hundred 
per  cent,  by  the  transaction.  We  then  buy  from  her  at 
gold  prices  and  pay  with  gold  or  products  at  prices  which,  by 
forcing  us  into  competitien  with  the  world,  England  fixes  her- 
self. 

Thus  it  can  be  seen  that  our  neighbors  in  Canada  are  not 
any  more  subject  to  British  rule  than  our  proud  republic — 
and  all  because  we  have  discarded  our  own  metal,  silver,  and 
submitted  humbly  to  the  golden  calf  of  England. 

7.  The  Resumption  of  Specie    Payment.    Janu- 
ary 14, 1875.    This  law  provided  for  the  retirement  of  the  frac- 
tional   currency  (45  millions)  and  the  legal-tender  treasury 
notes;  their  place  to  be  supplied  by  national  bank  notes,  which 
are  not  a  legal-tender  between  man  and  man.     The   name 
"specie  payment"  is  simply  a  blind;  it  does  not  mean  anything; 
to  get  rid  of  the  much  despised  greenback  was  the  real   object 
of  the  act.     The  moneyed  aristocracy  had  long  ago  confessed 
their  inability  to  "control"  the  "greenback  as  it  is  called. "  Had 
the  provisions  of  this  law  been  carried  out,  it  would  have  add- 
ed to  our  annual  interest  charge  about  twenty  millions  of 
dollars. 

8.  The  Sherman  Purchasing  Clause.     July  14^ 
1890.    This  act  was  a  miserable  makeshift  or  substitute  for  a 
free  coinage  bill.    It  provided  for  the  purchase  of  not  less  than 
2,000,000  nor  more  than  4,500,000  ounces  of  silver  bullion  per 
month,  2,000,000  ounces  of  which  was  to  be  coined  each  month 
into  silver  dollars  until  July  1,  1891.      Instead  of  redeeming 
the  treasury  notes  issued  in  the  purchase  of  silver  with  their 
equivalent  in  silver,  upon  the  demand  of  the  holder,  the  Secre- 


212  The  Eight  Money  Conspiracies. 

tary  of  the  Treasury  was  required  to  redeem  these  notes  in  gold 
or  silver  coin  at  his  discretion.  The  legal-tender  power  of  the 
silver  dollar  was  modified  so  as  to  read:  "except  otherwise  ex- 
pressly stipulated  in  the  contract."  In  1893  President  Cleveland 
called  Congress  together  in  extraordinary  session  to  consider 
the  financial  condition  of  the  country.  November  1,  1893,  the 
Sherman  law  was  repealed,  leaving  us  on  a  single  gold  basis. 


Modern  Reformers. 

The  world  has  had  reformers,  men  who  were  sternly  just, 
Who  smote  the  thrones  of  wickedness  and  laid  them  in  the 

dust; 
Meek,  tender  men,  made  mighty  by  mankind's  blood  and 

tears, 
Strong1  men  whose  words  were  thunderbolts  to  smite  the 

wrong  of  years. 

Were  all  these  stern  reformers  of  a  breed  too  weak  to  last? 
Did  all  the  great  wrong-smiters  wane  and  perish  in  the  past? 
Did  they  fight  a  losing  battle?    Were  they  conquered  in  the 

fray? 

Why  are  there  no  reformers  fighting  in  the  world  today? 
Well,  'tis  but  a  thing  of  labels;  the  reformers  have  not  gone, 
But  they're  mixing  with  the  people  with  misleading  placards 

on; 
For  we  placard  them  "fanatics,"'  "visionaries,"  "cranks," 

and  "  fools,"  — 
Men  denounced  by  clubs  and  churches,  by  the  journals  and 

the  schools. 
There  are  men  who  wear  these  placards  daily  in  the  market 

place, 

Heroes  of  the  ancient  lineage,  kings  and  saviors  of  the  race; 
And  we  do  not  see  their  greatness  through  life's  trivial 

events, 
But  our  children's  sons  will  read  it  on  their  granite  monu- 

ments. —  Sam  Walter  Fots. 


'  '  AND  our  flag  was  newly  woven,  every  stripe  and  every  star, 
With  the  cannon  balls  for  shuttles,  in  the  roaring  loom  of 

war; 
And  our  gallant  weavers  dyed  it  with  their  manhood  in  each 

hue  — 
Red  for  courage,  white  for  honor,  and  for  faithfulness  the 

bine."  —Howard  8.  Taylor, 


*  "  When  I  stand  in  the  United  States   Treasury  I  stand  on 
English  «>//."— NATHANIEL  P.  BANKS. 

THE  DOCUMENTARY  EVIDENCE. 


THAT  the  pernicious  financial  legislation  of  the  United 
States  was  not  due  merely  to  ignorance,  but  was  the  result 
of  a  most  damnable  conspiracy,  aided  by  venality  and  corrup- 
tion, is  proven  by  the  documents  which  follow.  The  reader  is 
asked  to  read  them  carefully.  Trace  the  winding  trail  of  the 
serpent  and  behold  its  glittering  golden  head. 

First  comes  the  famous  Hazzard  circular.  This  was  issued 
by  an  agent  of  the  London  capitalists  to  New  York  capitalists 
in  1862.  It  was  first  given  to  the  general  public  on  Sept.]  18, 
1886,  by  the  Council  Grove  (Kas.)  Guard,  being  reprinted  from 
a  copy  taken  from  the  letter  files  of  the  First  National  Bank 
of  Council  Grove: 

The  Hazzard  Circular. 

Slavery  is  likely  to  be  abolished  by  the  war  power,  and 
chattel  slavery  destroyed.  This  I  and  my  European  friends 
are  in  favor  of,  for  slavery  is  but  the  owning  of  labor  and  car- 
ries with  it  the  care  of  the  laborer,  while  the  European  plan, 
led  on  by  England,  is  capital  control  of  labor  by  controlling 
wages.  THIS  CAN  BE  DONE  BY  CONTROLLING  THE 
MONEY.  The  great  debt  that  capitalists  will  see  to  it  is  made 
out  of  the  war  must  be  used  as  a  measure  to  control  the  vol- 
ume of  money;  to  accomplish  this  the  bonds  must  be  used  as  a 
banking  basis.  We  are  now  waiting  to  get  the  Secretary  of  the 
Treasury  to  make  this  recommendation  to  Congress.  It  will  not 
do  to  allow  the  "greenback,"  as  it  is  called,  to  circulate  as 
money  any  length  of  time,  for  we  cannot  control  them,  but  w« 
can  control  the  bonds,  and  through  them  the  bank  issue. 

CHAS.  HAZZARD. 

HAZZARD  WAS  HEBE. 
STATE  OP  INDIANA,  ) 
County  of  Posey,     $  se 

James  G.  Nisbett,  being  duly  sworn  deposes  and  says:  I 
am  seventy-three  years  of  age  and  live  in  Posey  County,  Indi- 
ana, where  I  have  resided  for  sixty-five  years.  In  1861  I  and 
Sheridan  Anderson,  who  is  now  dead,  of  the  same  county,  en- 
listed in  the  service  of  the  United  States  Army,  Sixtieth  Regi- 

213 


214  The  Documentary  Evidence. 

ment  and  Company  C  of  the  Indiana  Infantry.  In  July,  1862, 
our  command  joined  the  forces  of  General  Dumont  at  Lebanon, 
Ky.  About  the  twenty -fifth  of  the  same  month  Mr.  Anderson 
and  myself  were  detailed  as  guards  and  placed  on  police  duty 
on  Main  Street.  In  passing  near  the  General's  headquarters  we 
were  hailed  and  ordered  to  "shadow"  a  party  of  three  persons- 
one  woman  andtwo  men-who  were  then  passing  on  the  opposite 
side  of  the  street,  find  out  their  business  and  report.  We 
learned  that  one  man  and  the  woman  were  Kentuckiann  and 
the  other  man  was  an  Englishman.  We  had  considerable  con- 
versation with  the  Englishman  who  gave  his  name  as  Chas. 
Hazzard.  He  said  he  had  recently  come  from  England  to  con- 
fer with  the  business  men  of  this  country  in  a  financial  scheme. 
We  told  him  that  he  was  lucky  in  striking  a  very  large  body  of 
very  busy  men,  and  as  representatives  of  headquarters  we  desired 
tangible  information  of  his  business  that  we  might  report  it  to 
the  authorities.  In  response  to  this  he  took  one  of  a  small 
package  of  envelopes  and  gave  it  to  Mr.  Anderson,  saying  its 
contents  would  explain  the  business  and  allay  any  suspicions 
that  might  have  arisen  regarding  him.  This  occurred  in  the 
post  office,  and  we  then  reported  the  matter  to  General  Du- 
mont at  headquarters,  giving  him  the  circular  in  the  presence 
uf  several  officers  who  happened  to  be  present  at  the  time.  An 
exact  copy  of  that  document  was  kept  by  us,  and  the  following 
is  a  correct  reading  of  the  same. 

[Here  follows  the  circular  printed  above.] 

JAMES  G.  NISBETT. 

Subscribed  and  sworn  to  before  me  this  29th  day  of  May, 
1894.  JOHN  B.  SMITH, 

(SEAL)  Notary  Public. 

Bribing  the  Law-Makers. 

The  following  shows  how  the  crime  of  1873  was  paid  for 
by  British  gold: 
STATE  OP  COLORADO,  ) 
County  of  Arapaboe.  > 

Frederick  A.  Luckenbach,  being  first  sworn,  on  oath  de- 
poses and  says:  "I  am  sixty-two  years  of  age.  I  was  born  in 
Bucks  County,  Pennsylvania.  I  removed  to  the  city  of  Phila- 
delphia in  the  year  of  1846,  and  continued  to  reside  there  until 
1866,  when  I  removed  to  the  city  of  New  York.  In  Philadel- 
phia I  was  in  the  furniture  business.  In  New  York  I  branched 
into  machinery  and  inventions,  and  am  the  patentee  of  Luck- 
enbach's  pneumatic  pulverizer,  which  machines  are  now  in  use 
generally  in  the  eastern  part  of  the  United  States  and  Europe. 
I  now  reside  in  Denver,  having  removed  from  New  York  two 


The  Documentary  Evidence.  215 

rears  ago.  I  am  well  known  in  New  York.  I  have  been  a  mem- 
ber of  the  Produce  Exchange  and  am  well  acquainted  with 
many  members  of  that  body.  I  am  well  known  by  Mr.  Erastus 
Wiman.  In  the  year  of  18G5  I  visited  London,  England,  for 
the  purpose  of  placing  there  Pennsylvania  oil  properties  in 
which  I  was  interested.  I  took  with  me  letters  of  introduction 
to  many  gentlemen  in  London,  among  them  one  to  Mr.  Ernest 
Seyd,  from  Robert  M.  Foust,  ex-Treasurer  of  Philadelphia.  I 
became  well  acquainted  with  Mr.  Seyd  and  also  with  bis 
brother,  Richard  Seyd,  who,  I  understand,  is  yet  living.  I  vis- 
ited London  thereafter  every  year,  and  at  each  visit  renewed 
my  acquaintance  with  Mr.  Seyd  and  upon  each  occasion  be- 
came his  guest  one  or  more  times,  joining  his  family  at  dinner 
or  other  meals.  In  February,  1874,  while  on  one  of  these  visits 
and  while  his  guest  at  dinner,  I,  among  other  things,  alluded 
to  rumors  afloat  of  Parliamentary  corruption  and  expressed  as- 
tonishment that  such  corruption  should  exist.  In  reply  to  this, 
he  told  me  he  could  relate  facts  about  corruption  of  the  Ameri- 
can Congress  that  would  place  it  far  ahead  of  the  English  Par- 
liament in  that  line. 

So  far  the  conversation  was  at  the  dinner  table  between 
us.  His  brother  Richard  and  others  were  there  also,  but  this 
was  table  talk  between  Mr.  Ernest  Seyd  and  myself.  After  the 
dinner  had  ended  he  invited  me  to  another  room,  where  he  re- 
sumed the  conversation  about  legislative  corruption.  He 
said:  "If  you  will  pledge  me  your  honor  as  a  gentleman  not  to 
divulge  what  I  am  about  to  toll  you  while  I  live.  1  will  convince 
you  that  what  I  said  about  the  American  Congress  is  true."  I 
gave  him  my  promise,  and  he  then  continued:  "I  went  to 
America  in  the  winter  of  1872-3,  authorized  to  secure,  if  I  could, 
the  passage  of  a  bill  demonetizing  silver.  It  was  to  the  inter- 
ests of  those  whom  I  represent— the  Governors  of  the  Bank  of 
England — to  have  it  done.  I  took  with  me  £100.000  with  in- 
structions, if  that  was  not  sufficient  to  accomplish  the  object, 
to  draw  for  another  £100,000  or  as  much  more  as  was  neces- 
sary." He  told  me  German  bankers  were  also  interested  in 
having  it  accomplished.  He  said  he  was  the  financial  adviser 
of  the  bank.  He  said:  "I  saw  the  committees  of  the  House 
and  Senate  and  paid  the  money  and  staid  in  America  until  I 
knew  the  measure  was  safe." 

I  asked  if  he  would  give  the  names  of  the  members  to 
whom  he  paid  the  money,  but  this  he  declined  to  do.  He  said: 
"Your  people  will  not  now  comprehend  the  far-reaching  extent 
of  that  measure,  but  they  will  in  after  years.  Whatever  you 
may  think  of  corruption  in  the  English  Parliament,  I  assure 
you  I  would  not  have  dared  to  make  such  an  attempt  here  as  I 
did  in  your  country." 

I  expressed  my  shame  to  him  for  my  countrymen  in  our 


216  The  Documentary  Evidence. 

legislative  bodies.  The  conversation  drifted  into  other  sub- 
jects, and  after  that,  though  I  met  him  many  times,  the  matter 
was  never  again  referred  to. 

FREDERICK  LUCKEWBACH. 

Subscribed  and  sworn  to  before  me  at  Denver,  Colo.,  this 
6th  day  of  May,  A.  D.  1892. 

(Signed)  JAMES  A.  MILLER, 

Clerk  Supreme  Court,  State  of  Colorado. 

Bribing  the  Press. 

The  following  is  taken  from  the  Chicago  Inter  Ocean  of 
October  29, 1877,  and  reproduced  exactly  as  found  in  the  bound 
flies  of  that  newspaper: 

The  Inter  Ocean  acknowledges  the  receipt  of  the  following 
singular  document,  which  came  to  this  office  from  New  York. 
Saturday  morning: 

"AMERICAN  BANKERS'  ASSOCIATION,  ) 
247  Broadway,  Room  4,         [ 
NEW  YORK,  Oct.  0, 1877.  ) 
"Strictly  Private. 

"  DEAR  SIR:  Please  insert  the  enclosed  printed  slip  as 
leaded  matter  on  the  editorial  page  of  your  first  issue  imme- 
diately following  the  receipt  of  this,  and  send  marked  copy 
with  the  bill  to  Yours  truly,  JAS.  BUEL,  Sec'y, 

"Comments  on  the  slip,  not  to  exceed  half  a  column,  will 
be  paid  for  if  billed  at  the  same  time. — J.  B." 

The  following  is  the  document,  which  we  are  asked  to  in- 
sert as  leaded  matter  on  the  editorial  page,  in  other  words,  as 
a  statement  made  by  the  Inter  Ocean: 

"The  Greenback  party  has  offered  through  its  managers  to 
sell  out  to  the  Democrats  and  hereafter  to  work  in  Democratic 
harness  if  a  few  of  their  leaders  can  be  provided  for.  This 
shows  how  much  dependence  there  is  to  be  placed  on  the 
leaders  of  the  lunatics  who  clamor  for  money  based  on  nothing." 

We  insert  this,  but  we  shall  send  no  bill  for  it.  We  shall 
send  no  bill  because,  in  the  first  place,  we  do  not  follow  direc- 
tions about  leading  it;  secondly,  we  can't  believe  a  word  of  the 
statement  to  be  true.  We  do  not  know  who  is  managing  the 
affairs  of  the  American  Bankers'  Association,  but,  whoever  he 
is,  we  advise  that  body  to  get  rid  of  him  without  delay.  The 
attempt  to  thus  maliciously  destroy  the  Green  back  party  with- 
out submitting  a  word  of  proof  is  a  piece  of  aff  rontery  which 
ought  to  be  beneath  any  body  of  commercial  gentlemen,  and 
especially  the  American  Bankers'  Association.  We  refuse  to 
believe  that  such  an  extraordinary  document  was  authorized 
by  that  body. 


The  Documentary  Evidence.  217 

Since  the  above  was  put  in  type  we  have  received  a  copy 
of  the  New  York  Sim  containing  the  above  circular,  which  it 
appears  was  sent  that  paper  also.  The  Sun  publishes  the 
document  with  editorial  comment,  from  which  we  quote  as  fol- 
lows: 

"  This,  we  say,  is  an  extraordinary  circular,  with  an  extra- 
ordinary slip.  It  will  be  seen  that  the  slip  is  or  assumes  to  be, 
an  item  of  news.  It  is  an  item  that  none  of  the  ubiquitous  re- 
porters of  the  Sun  had  been  able  to  get  held  of.  If  any  one  of 
them  had  brought  it  to  us  properly  authenticated  by  docu- 
mentary or  other  evidence,  we  would  not  have  asked  him  to 
pay  us  for  printing  it,  but,  on  the  contrary,  we  would  have  paid 
him  well  for  procuring  it.  It  will  be  observed,  however,  that 
the  scandalous  item  which  we  are  asked  in  the  name  of  the 
American  Bankers'  Association  to  publish,  has  two  peculiar- 
ities: First,  no  proof  of  its  accuracy  is  furnished;  and  secondly, 
we  are  offered  money  for  its  publication  as  leaded  matter  on 
the  editorial  page  of  this  day's  Sun.  This  is  remarkable  busi- 
ness to  be  performed  in  the  name  of  the  American  Bankers' 
Association. 

"Our  astonishment  is  increased  by  the  postcript  which  ap- 
pears at  the  bottom  of  this  circular.  It  informs  us  that  com- 
ments upon  the  slip,  not  to  exceed  half  a  column,  will  be  paid 
for.  This  means,  of  course,  that  the  editorial  comments  that 
are  to  be  paid  for  must  sustain  the  slip  on  the  editorial  page 
that  is  to  be  paid  for.  .  .  .  But  is  this  attempt  to  bribe  and 
corrupt  the  press,  by  the  direct  offer  of  money  for  editorial 
articles  made  under  the  authority  of  the  American  Bankers' 
Association,  the  name  of  the  secretary  of  which  is  signed  to 
the  circular  above  printed?  We  call  for  information  upon  thiB 
point,  and  shall  wait  for  it.  If  authority  has  been  given  to 
bribe  the  press,  then  very  certainly  attempts  will  be  made  to 
bribe  Congress  and  corrupt  the  sources  of  influence  at  Wash- 
ington in  the  same  interest.  It  is  a  shameful  business,  if  there 
be  not  some  mistake  about  it.  Let  the  truth  be  brought  out. 
Let  a  responsibility  for  this  circular  be  fixed.  If  this  circular 
s  a  forgery  we  shall  be  glad  to  make  it  known." 

Following  is  the  printed  slip  offered  for  the  Sun  to  print; 

"  The  prospect  is  that  in  six  months  there  will  not  be  a 
Greenback  leader  in  all  the  land.  Overtures  have  been  made 
by  the  leaders  of  the  Greenback  movement  to  President  Hayes 
to  abandon  the  greenback  as  a  lost  cause,  provided  he  will 
give  good  official  positions  to  about  twenty  of  the  most  blatant 
of  those  clamorous  for  money  that  is  based  on  nothing." 


218  The  Documentary  Evidence, 

The  Banks'  Circular. 

The  following  circular  was  sent  out  in  1878  by  the  bankers 
of  New  York  to  the  national  banks: 

NEW  YORK,  Oct.  9, 1878. 

DEAR  SIR:  It  is  advisable  to  do  all  in  your  power  to  sus- 
tain such  prominent  daily  and  weekly  newspapers,  especially 
the  agricultural  and  religious  press,  as  will  oppose  the  issuing 
of  greenback  paper  money,  and  that  you  also  withhold  patron- 
age or  favors  from  all  applicants  who  are  not  willing  to  oppose 
the  government  issue  of  money.  Let  the  government  issue  the 
coin  and  the  banks  issue  the  paper  money  of  the  country,  for 
then  we  can  better  protect  each  other.  To  repeal  the  law 
creating  national  bank  notes,  or  to  restore  to  circulation  the 
government  issue  of  money,  will  be  to  provide  the  people  with 
money,  and  will  therefore  seriously  affect  your  individual  profit 
as  bankers  and  lenders.  See  your  Congressman  at  once,  and 
engage  him  to  support  our  interests  that  we  may  control  legis- 
lation. JAMES  BUEL, 

Secretary,  247  Broadway. 

The  Extra  Session  Letter. 

The  following  is  reprinted  from  an  original  copy  of  the 
letter  in  possession  of  Mr.  George  C.  Ward: 

THE  AMERICAN  BANKERS'  ASSOCIATION.  ) 

No.  2  WALL  ST.  AND  90-94  BROADWAY,  ROOM  No.  44.       t 
NEW  YORK,  August  19, 1893.  ) 
To  the  Bankers  of  the  United  States. 

Gentlemen:  The  extraordinary  monetary  crisis  through 
which  the  United  States  are  passing,  which  involves  the  banks 
of  the  country  to  an  extent  that  compels  their  officers  to  re- 
main constantly  at  the  post  of  duty  while  the  danger  is  immi- 
nent, has  constrained  the  American  Bankers'  Association  to 
indefinitely  postpone  its  annual  convention  called  for  the  6th 
and  7th  prox.,  at  Chicago.  This  will  prevent  such  expres  ion 
upon  the  part  of  the  association  as  the  financial  situation  de- 
mands, which  otherwise  would  be  made.  It  thus  becomes  the 
duty  of  the  officers  of  the  Association  to  speak  for  it  at  this 
time,  and  suggest  what  seems  to  them  to  be  the  proper  action 
for  the  bankers  of  the  country  to  immediately  take  with  a  view 
to  obtaining  speedy  relief  from  the  continued  and  disastrous 
stringency. 

It  is  manifest  that  the  immediate  cause  of  rthe  prolonged 
stringency  is  the  fear  and  appreciation  of  disaster  engendered 
in  the  minds  of  the  people  by  the  continued  purchases  of  silver 


The  Documentary  Evidence.  219 

by  the  government,  and  by  the  unceasing  issues  of  its  obliga- 
tions therefor,  redeemable  in  gold,  which  fear  and  apprehension 
can  only  be  removed  and  confidence  restored  by  the  removal  of 
the  cause..  It  is  believed  that  the  bankers  of  the  country  will 
understand  and  realize  this  to  as  great,  if  not  to  a  greater,  extent 
than  any  other  class  of  citizens,  and  it  therefore  becomes  the 
duty  of  such  of  them  as  fully  realize  this  to  urge  upon  their 
fellow- citizens  and  upon  Congress  the  great  necessity  for  the 
immediate  and  unconditional  repeal  of  the  purchasing  clause 
of  the  Sherman  silver  act. 

The  repeal  of  this  clause  is  demanded  in  the  interpst  of 
those  favoring  a  gold  standard,  and  of  those  favoring  the  use  of 
silver  with  gold,  as  the  continued  purchase  of  enormous  quan- 
tities of  silver  with  gold  obligations  can  only  result  in  the  final 
inability  of  the  government,  to  redeem  such  obligations  in  gold, 
and  in  the  continued  over-production  and  consequent  further 
depreciation  of  silver,  thus  rendering  the  prospect  of  any  inter- 
national agreement  for  its  more  general  use  throughout  the 
world  more  hopeless  than  at  present. 

The  President  of  the  United  States  having  convened  Con- 
gress in  extra  session  and  recommended  to  it  such  repeal,  the 
power  of  public  opinion  should  be  brought  to  bear  upon  Con- 
gress, to  induce  favorable  action  thereon.  This  may  best  be 
done  by  invoking  the  aid  of  the  press,  and  by  citizens  writing 
to  their  Senators  and  Representatives,  and  by  sending  to  them 
petitions  urging  such  repeal;  all  of  which  should  be  done  to  the 
fullest  extent  possible,  and  without  delay. 

A  blank  form  of  petition  is  enclosed,  to  be  circulated 
among  merchants,  business  men  and  others  for  their  signatures, 
to  which  additional  sheets  may  be  appended.  Act  at  once  in 
the  matter  and  secure  the  intelligent  co-operation  of  others, 
providing  them  with  printed  or  typewritten  copies  of  the  peti- 
tion for  the  purpose.  Respectfully, 

WILLIAM  H.  RHAWN.  President. 

E.  H.  PULLEN.  Chairman  Executive  Council. 

H.  W.  FORD,  Secretary. 


"TAXES  ought,  of  course,  to  be  paid;  but  there  are  many 
ways  of  collecting  taxes  without  robbing  a  man  of  his  home, 
for  a  few  dollars.  The  home  should  be  sacred.  Strictly  it 
should  pay  no  taxes.  It  is  the  spot  of  land  on  which  God 
places  a  family.  It  should  be  walled  in  against  the  selfish- 
ness and  cruelty  of  mankind;  and  the  very  lightnings  of 
heaven  should  play  around  it  to  defend  it;  even  as  the  fiery 
sword,  turning  every  way,  guarded  the  gate  of  Paradise." — 
Ignatius  Donnelly. 


&  "  The  time  has  come  ivhen  the  railroad  corporations  will 
either  own  the  people,  or  the  people  must  own  the  railroads. 
*  *  *  The  Government  should  own  and  operate  the  railroads 
in  the  interest  of  the  people." — Omaha  Platform. 


THE  TRANSPORTATION  PROBLEM. 

•^ 

ATKINSON  estimates  that  into  the  cost  of  every  article 
enters  an  average  of  eight  per  cent,  for  transportation- 
This  alone  would  make  the  railroad  problem  a  most  important 
one.  But  many  other  considerations  combine  to  add  to  the 
momentum  with  which  the  subject  is  forcing  itself  upon  the 
attention  of  the  American  people.  The  abuses  which  have 
crept  into  railroad  management  in  this  country,  long  tolerated 
by  the  people  and  unchecked  and  even  encouraged  by  public 
officers,  have  now  assumed  such  proportions  as  to  threaten  the 
very  foundation  of  free  government. 

In  his  famous  work,  "The  Railroad  Question,"  which  every 
American  voter  who  wishes  to  be  well  informed  should  read 
Hon.  William  Larrabee,  the  great  railroad  Governor  of  Iowa, 
says: 

"Great  discoveries  that  add  rapidly  to  the  wealth  of  a 
country  tend  to  overthrow  a  settled  condition  of  things,  and 
organized  capital  and  labor,  if  not  restrained  by  wholesome 
laws  and  public  watchfulness,  will  ever  take  advantage  of  the 
unorganized  masses.  The  people  of  those  regions  which  the 
railroad  stimulus  had  caused  to  be  settled  thrived  for  years  so 
well  upon  a  virgin  soil  that  they  gladly  divided  their  surplus 
with  the  railroad  companies.  They  looked  upon  the  railroads 
as  the  source  of  their  prosperity  and  upon  railroad  managers 
as  high-minded  philanthropists  and  public  benefactors,  with 
whom  to  quarrel  would  be  an  act  of  sordid  ingratitude,  and 
they  paid  but  little  attention  to  the  means  employed  by  them 
to  exact  an  undue  share  of  their  earnings.  Railroad  men  did 
whatever  they  could  to  foster  through  their  emissaries  this 
misplaced  adoration.  They  posed  before  the  public  as  the 
rightful  heirs  of  the  laurels  of  Watt  and  Stephenson,  insisting 
that  their  genius,  capital  and  enterprise  had  built  up  vast  cities 
and  opened  for  settlement  and  civilization  the  boundless  prai- 
ries of  the  West.  These  claims  have  been  persistently  re- 
peated by  railroad  men,  though  they  are  so  preposterous  that 

220 


The  Transportation  Problem.  381 

they  scarcely  deserve  refutation.  The  railroad,  gradually  de- 
veloped by  active  minds  of  the  past,  and  greatly  improved  by 
the  inventions  of  hundreds  of  men  in  the  humbler  walks  of 
life,  is  the  common  inheritance  of  all  mankind,  though  no 
class  of  people  have  derived  greater  benefits  from  it  than  rail- 
road constructors,  managers  and  manipulators.  Railroad  man- 
agers are  no  more  entitled  to  the  special  gratitude  of  the  pub- 
lic for  dispensing  railroad  transportation  at  much  more  than 
remunerative  rates  than  is  the  Western  Union  monopoly  for 
maintaining  among  us  an  expensive  and  inefficient  telegraph  ser- 
vice. No  one  believes  that  the  disbanding  of  the  Western  Union 
would  leave  us  long  without  telegraphic  communication.  In 
like  manner  railroads  will  be  built  whenever  and  wherever  they 
promise  to  be  profitable.  If  one  company  does  not  take  advan- 
tage of  the  opportunities  offered,  another  will.  That  large 
cities  have  been  built  up  by  the  railroads  is  true,  but  it  is 
equally  true  that  these  cities  by  their  commerce  and  manufac- 
tures administer  to  the  prosperity  of  the  railroads  as  much  as 
the  railroads  administer  to  theirs.  Commercial  centers  in  days 
gone  by  existed  without  railroads,  but  railroads  could  not  long 
exist  without  the  stimulating  influence  of  these  busy  marts  of 
trade.  The  same  argument  applies  with  still  greater  force  to 
the  agricultural  sections  of  our  country,  especially  the  great 
Northwest.  Th«  dry -goods  merchant  might  as  well  boast  of 
having  clad  the  public  as  the  railroad  manager  of  having  built 
up  farming  communities  by  selling  to  them  transportation. 

"  And  yet  the  American  people  have  never  ceased  to  be 
mindful  of  the  conveniences  afforded  to  them  by  this  modern 
mode  of  transportation.  On  the  contrary,  they  have  been  but 
too  prone  to  credit  railroad  men  with  being  benefactors,  when 
they  were  but  beneficiaries,  and  this  liberality  of  spirit  made 
them  overlook,  or  at  least  tolerate,  the  abuses  which  grew  pro- 
portionately with  the  wealth  and  power  of  the  companies. 

"The  first  railroad  acts  of  England  had  contemplated  to 
make  the  roads  highways,  like  turnpikes  and  canals.  These 
roads  were  established  by  the  power  of  eminent  domain.  Com- 
panies were  empowered  to  build  and  maintain  them  and  to  re- 
imburse themselves  by  the  collection  of  fixed  tolls.  Had  the 
owners  of  the  roads  from  the  beginning  been  deprived  of  the 
privilege  of  becoming  carriers  over  their  own  lines,  the  system 
might  have  so  adjusted  itself  as  to  become  entirely  practicable; 
but  as  they  were  allowed  to  compete  with  other  carriers  in  the 
transportation  of  passengers  and  merchandise,  they  were  soon 
able  to  demonstrate,  at  least  to  the  satisfaction  of  Parliament, 
that  the  use  of  the  track  by  different  carriers  was  impracticable 
and  unsafe.  A  number  of  circumstances  combined  to  aid  the 
railroads  in  their  efforts  to  monopolize  the  trade  on  their  lines. 


222  The  Transportation  Problem. 

In  the  first  place,  when  the  early  railroad  charters  were  granted, 
but  few  persons  had  any  conception  of  the  enormous  growth 
of  commerce  which  was  destined  to  follow  everywhere  the  in- 
troduction of  railways.  The  tolls  as  fixed  in  the  charter  soon 
yielded  an  income  out  of  proportion  to  the  cost  of  the  cdnstruc- 
tion  and  maintenance  of  the  roads.  Their  large  margin  of  profit 
enabled  the  owners  of  the  roads  to  transport  goods  at  lower 
rates  than  other  carriers  and  to  thus  compel  the  latter  to  aban- 
don their  business.  Another  defect  of  the  original  charters 
worked  greatly  to  the  disadvantage  of  independent  carriers. 
They  contained  no  provision  as  to  the  use  of  terminal  facilities. 
The  railroad  companies  claimed  that  these  facilities  were  not 
affected  by  the  public  franchise  and  were  therefore  their  per- 
sonal property.  This  placed  independent  carriers  at  a  great 
disadvantage  and  made  in  itself  competition  on  a  large  scale 
impossible.  These  carriers  were  thus  at  the  mercy  of  the  rail- 
road companies  for  the  transportation  of  their  cars,  and  the 
companies  never  permitted  their  business  to  become  lucrative 
enough  to  induce  many  to  engage  in  it.  It  soon  became  ap- 
parent that  under  the  charters  granted  to  the  railroad  com- 
panies such  competition  as  existed  on  turnpikes  and  canals 
was  out  of  the  question  on  their  roads.  In  England  the  great 
abundance  of  water-ways  exercised  for  many  years  a  whole- 
some control  over  the  rates  of  railway  companies,  until  these 
companies,  greatly  annoyed  by  such  restraint,  absorbed  many 
of  the  larger  canals  by  purchase  and  made  them  tributary  to 
their  systems.  These  companies  have  also  acquired  complete 
control  over  many  harbors. 

"In  the  United  States  the  people  depended  from  the  be- 
ginning of  the  railroad  era  on  free  competition  for  the  regula- 
tion of  railroad  charges.  This  desire  to  maintain  free  compe- 
tition led  to  the  adoption  of  general  incorporation  acts,  it  being 
generally  believed  that  such  competition  as  obtains  between 
merchants,  manufacturers  and  mechanics  was  possible  among 
railroads  and  would,  when  allowed  to  be  operative,  regulate 
prices  and  prevent  abuses.  The  remedy  was  applied  freely 
throughout  the  country,  but  for  once  it  did  not  prove  successful. 
Stephenson's  saying,  that  where  combination  was  possible,  com- 
petition was  impossible,  was  here  fully  verified.  The  great  in- 
genuity of  the  class  of  men  usually  engaged  in  railroad  enter- 
prises succeeded  in  thwarting  this  policy  of  commercial  free- 
dom. The  opportunities  for  those  in  control  of  railroads  to 
operate  them  in  their  own  interest  regardless  of  the  interests 
of  their  patrons  and  stockholders  were  so  great  that  men  of  a 
speculative  turn  of  mind  were  attracted  to  this  business,  which 
soon  proved  a  most  productive  field  for  them.  One  road  after 
another  fell  into  the  control  of  men  who  had  learned  rapidly 
the  methods  employed  to  make  large  fortunes  in  a  short  time." 


The  Transportation  Problem.  223 

On  the  subject  of  watered  railroad  stocks,  Gov.  Larrabee 
eays: 

"It  is  a  notorious  fact  that  the  stock  of  a  large  number  of 
railroad  companies  represents  little  or  no  value,  having  either 
been  sold  at  a  mere  nominal  price  or  been  donated  as  a  pre- 
mium or  bonus  to  those  who  purchased  a  large  amount  of  the 
company's  bonds.  In  recommending,  in  his  December,  1891, 
annual  mssage,  government  aid  for  the  Nacaragua  Canal, 
President  Harrison  said:  'But  if  its  bonds  are  to  be  marketed 
at  heavy  discounts  and  every  bond  sold  is  to  be  accompanied 
by  a  gift  of  stock,  as  has  come  to  be  expected  by  investors  in 
such  enterprises,  the  traffic  will  be  seriously  burdened  to  pay 
interest  and  dividends.'  It  is  not  difficult  to  surmise  to  what 
enterprises  the  President  referred.  It  has  for  many  years  been 
a  well-settled  principle  among  railroad  incorporates  that  no 
larger  assessments  should  be  made  upon  the  stockholders  than 
is  necessary  to  float  the  company's  bonds.  A  company,  for  in- 
stance, is  organized  with  a  capital  stock  of,  say,  $1,000,000. 
Five  per  cent,  of  this  sum,  or  850,000,  is  paid  in  to  defray  pre- 
liminary expenses.  The  road  is  then  bonded  for  perhaps  $2,- 
000,000,  but  as  the  bonds  are  sold  for  only  80  per  cent,  of  their 
face  value  and  as  the  incorporators  allow  themselves  five  per 
cent,  for  the  negotiation  of  bonds,  only  $1,500,000  is  realized 
for  the  construction  of  the  road.  The  incorporators  now  vote 
to  themselves  a  contract  to  construct  the  road  for  §1,500,000 
and  at  once  sublet  it  to  a  contractor  who  is  ready  atd  anxious 
to  build  the  road  for  $1,200,000.  The  incorporators  thus  realize 
$1,000,000  worth  of  stock,  a  portion  of  which  is  unloaded  upon 
unsophisticated  investors,  and  $300,000  in  cash,  at  an  outlay  of 
850,000;  and  the  road,  which  cost  81,200,000,  is  made  to  pay  in- 
terest and  dividends  on  a  total  capital  of  §3.000,000,  and  this  is 
subsequently  watered  indefinitely  if  the  road  proves  profitable 
or  a  consolidation  with  some  other  road  justifies  the  belief  that 
its  earning  capacity  might  be  increased.  Nor  is  this  an  over- 
drawn picture.  On  the  contrary,  instances  might  be  cited 
where  only  one-half  of  one  per  cent,  of  the  company's  stock 
was  paid  in  by  the  shareholders." 

Space  does  not  permit  here  to  go  fully  into  the  subject  of 
railroad  abuses.  The  reader  is  referred  to  the  chapter  headed 
"A  New  Study  of  Political  Economy"  for  further  information, 
and  those  who  wish  to  inform  themselves  fully  on  all  phases  of 
therast  subject  should  read  carefully  Gov.  Larrabee's  book. 
That  the  system  of  railroad  corporations  as  now  existing  has 
been  the  source  of  the  gravest  evils  is  everywhere  apparent. 
The  case  of  the  Camden  and  Am  boy  Railroad  as  related  by  Gov. 


224  The  Transportation  Problem. 

Larrabee  is  a  startling  instance  of  corporate  corruption.  There 
never  was  a  more  flagrant  case  of  public  robbery  than  that  of 
the  Union  Pacific  roads.  The  great  Standard  Oil  monopoly 
would  have  been  impossible  but  for  the  power  and  tendency  of 
the  railroads  to  kill  competition.  Perhaps  no  other  factor  has 
been  BO  powerful  in  bringing  about  that  concentration  of 
wealth  which  is  undermining  the  foundations  of  our  republic. 


UC  SOUTHERN  REGIONAL  LIBRARY  FACILITY 


A     000  689  449     7 


Sex  and  Life 


THE  PHYSIOLOGY  AND  HYGIENE 
OF  THE  SEXUAL  ORGANIZA  TION 


BY 

Eli  P.  Brown,  M.  S.,  M.  D. 


ILLUSTRATED 


/6t*0,  cloth  extra,  price  $uoo 

y  "  A  very  sensible  book  y  After  describing  the  common  sex 
principle  in  plants  and  animals  the  author  enters  upon  the 
discussion  of  conjugal  love,  heredity,  the  use  and  abuse  of 
the  sexual  passion,  and  other  topics  which  seldom  find  a  place 
in  a  volume  of  general  reading  V  His  work  cannot  fail  to  have 
good  results,  for  his  suggestions  are  wise,  and  the  informa- 
tion he  furnishes  shoula  be  known  to  all" — San  Francisco 
Chronicle 

y  "A  modest,  compact,  scientific  exposition,  *  *  *  based 
upon  the  theory  that  there  is  no  subject  of  greater  impor- 
tance y  The  innocence  that  is  innocent  simply  because  of 
ignorance  is  the  unsafest  thing  in  the  world,  unless  it  be  the 
virtue  that  is  virtuous  only  because  it  has  never  been 
tempted,  or  the  honesty  that  is  honest  from  policy  only" — 
Chicago  Times 

y  "  How  to  teach  such  truths  has  been  the  study  of  many  a 
teacher  and  many  a  parent  y  There  is  but  one  proper  way, 
and  that  is  by  plain  facts  which,  while  teaching  the  truths  of 
science,  impress  upon  the  pupil  the  grandeur  of  right  living  y 
Dr.  Brown  strikes  these  chords  admirably  ••—Imer-vcean 

Seat  by  Mall,  to  any  address,  on  receipt  ol  price 

SCHULTE  PUBLISHING  CO. 
CHICAGO 


'A  Great  American  Novel '' 


fln  *  Indiana  *  man 

By 
LE  ROY  ARMSTRONG 

12MO,  PAPER,  25c. 

A  NEW  EDITION,  at  Reduced  Price,  of  this    Powerful    and 
Fascinating  Novel 

y  "Out  of  the  every-day  happenings  of  a  country  town  the 
author  has  constructed  a  story  that  holds  the  reader's 
atteniion  from  beginning  to  .  mid. 

y  "  A  powerful  i.ov;1!,  charmingly  written.     Po  true  to  the  real  life  of  modern 
politics  as  to  seem  more  like  history  and  biography  than   romance." — ("// 
>'  eiin. 

y  "The  story  centers  in  the  saloon  of  an  Indiana  town.  .  . 
There  is  not  a  line  of  moralizing  in  it,  but  it  is  a  faithful, 
realistic,  dramatic,  moving  recital  of  events.     The    sci 
of  rural  life  are  depicted  with  a  graphic  skill  that  would  not 
have   done   discredit   to   the   immortal    author    of    'Adam 

y  "  Any  one  opposed  to  the  liquor  tniflic  \vho  reads  'An  Indiana  "Man'  is  at 
once  impressed  with  the  feeling  that  it  ought  to  be  re  .id  in  every  home  in  our 
land.  It  bears  tin  ion  to  the  light  against  the  saloon  that  '  1'nr  le 

I'om's  Cabin'  did  to  the  fight  against  slavery."— JOHN  P.  ST.  JOHN. 

y  "  Its  purpose  is   to  purify  persona!    living   and   CO 
politics.     No  man    could   ha\> 
motive." — FRANCKS,  E.  WILLABD. 

y  "The  description  of  the  old-time  'spelling  match'  ily  our  boy- 

hood days  and  is  well  worth  twice  the  co^l  »o  M. 

PACKARD. 

Sent  to  any  address,  postage  paid,  on  receipt  of  price 


THE  SCHULTE  PUBLISHING  CO. 

334  Dearborn  Street  CHICAGO 


